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Designing More Efficient Markets: Lessons from Los Angeles Smog Control

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Author Info
Foster, Vivien
Hahn, Robert W

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Abstract

Market-based approaches for environmental protection are beginning to take root around the world. This article attempts to improve our understanding of the performance of environmental markets by constructing and evaluating an information base on trades in Los Angeles, which includes the first detailed data on trading prices. The analysis suggests that trading activity has been shaped by the detailed regulations governing the market. In addition, transaction costs have played a crucial role. We argue that the move toward adopting market-based approaches for environmental protection needs to be accompanied by a vigorous effort to assess the properties of these systems as they are actually implemented. Copyright 1995 by the University of Chicago.

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Publisher Info
Article provided by University of Chicago Press in its journal Journal of Law & Economics.

Volume (Year): 38 (1995)
Issue (Month): 1 (April)
Pages: 19-48
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Handle: RePEc:ucp:jlawec:v:38:y:1995:i:1:p:19-48

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  1. Andersson, Thomas, 1997. "The Tropical Forests as a Global Resource: Impacts of Trade-Related Policy," Working Paper Series in Economics and Finance 187, Stockholm School of Economics, revised 01 Nov 1997. [Downloadable!]
  2. Regina Betz & Todd Sanderson & Tihomir Ancev, 2009. "In or out? Efficient inclusion of installations in an emissions trading scheme," Environmental Economics Research Hub Research Reports 0928, Environmental Economics Research Hub, Crawford School, Australian National University. [Downloadable!]
  3. Sergey Rabotyagov & Hongli Feng & Catherine L. Kling, 2006. "Optimal Design of Permit Markets with an Ex Ante Pollution Target," Center for Agricultural and Rural Development (CARD) Publications 06-wp430, Center for Agricultural and Rural Development (CARD) at Iowa State University. [Downloadable!]
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  4. Stavins, Robert, 2003. "Market-Based Environmental Policies: What Can We Learn from U.S. Experience and Related Research?," Working Paper Series rwp03-031, Harvard University, John F. Kennedy School of Government. [Downloadable!]
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  5. Fershtman, C. & Zeeuw, A. de, 1996. "Tradeable emission permits in oligopoly," Discussion Paper 30, Tilburg University, Center for Economic Research. [Downloadable!]
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  6. L. Gangadharan & A. Farrell & R. Croson, 2005. "Investment Decisions and Emissions Reductions:Results from Experiments in Emissions Trading," Department of Economics - Working Papers Series 942, The University of Melbourne. [Downloadable!]
  7. Juan-Pablo Montero, 2004. "Markets for environmental protection: design and performance incomplete enforcement," Estudios de Economia, University of Chile, Department of Economics, vol. 31(1 Year 20), pages 79-99, June. [Downloadable!]
  8. Evans, David A. & Kruger, Joseph A., 2006. "Taking up the Slack: Lessons from a Cap-and-Trade Program in Chicago," Discussion Papers dp-06-36, Resources For the Future. [Downloadable!]
  9. Lata Gangadharan, 2004. "Analysis of prices in tradable emission markets: an empirical study of the regional clean air incentives market in Los Angeles," Applied Economics, Taylor and Francis Journals, vol. 36(14), pages 1569-1582, August. [Downloadable!] (restricted)
  10. Reimund Schwarze & Peter Zapfel, 2000. "Sulfur Allowance Trading and the Regional Clean Air Incentives Market: A Comparative Design Analysis of two Major Cap-and-Trade Permit Programs?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 17(3), pages 279-298, November. [Downloadable!] (restricted)
  11. Schwabe, Kurt A. & Smith, V. Kerry, 1998. "Have Incentive Based Policies Been Oversold?," 1998 Annual meeting, August 2-5, Salt Lake City, UT 20787, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  12. Blackman, Allen & Harrington, Winston, 1999. "The Use of Economic Incentives in Developing Countries: Lessons from International Experience with Industrial Air Pollution," Discussion Papers dp-99-39, Resources For the Future. [Downloadable!]
  13. Speir, Cameron & Stephenson, Kurt & Shabman, Leonard, 2000. "Command-And-Control Or Effluent Allowance Markets: Roles Of Economic Analysis," 2000 Annual meeting, July 30-August 2, Tampa, FL 21869, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  14. Juan Pablo Montero, 2004. "Markets for Environmental Protection; Desing and Performance," Documentos de Trabajo 269, Instituto de Economía. Pontificia Universidad Católica de Chile.. [Downloadable!]
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