Implications Of Alternative Emission Trading Plans: Experimental Evidence
AbstractTwo approaches to emissions trading are cap-and-trade, with an aggregate cap on emissions distributed as emission allowances, and baseline-and-credit, with firms earning emission reduction credits for emissions below baselines. Theory suggests the long-run equilibria of the plans will differ with baselines proportional to output. To test this prediction we develop a computerized environment in which subjects representing firms can adjust their emission rates and capacity levels and trade emission rights in a sealed-bid auction. Demand for output is simulated. We report on six laboratory sessions with variable emissions rates, but fixed capacity: three each with the cap-and-trade and baseline-and-credit mechanisms. Copyright 2006 Blackwell Publishing Ltd
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Pacific Economic Review.
Volume (Year): 11 (2006)
Issue (Month): 2 (06)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1361-374X
Other versions of this item:
- Neil J. Buckley & S. Mestelman & Andrew Muller, 2004. "Implications of Alternative Emission Trading Plans: Experimental Evidence," Department of Economics Working Papers 2004-07, McMaster University.
- C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
- L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
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