Tradable Permits with Incomplete Monitoring: Evidence from SantiagosÂ’s Particulate Permits Programs
AbstractI explore the advantages of tradable emission permits over uniform emission standards when the regulator has incomplete information on firmsÂ’ emissions and costs of production and abatement (e.g., air pollution in large cities). Because the regulator only observes each firmÂ’s abatement technology but neither its emissions nor its output, there are cases in which standards can lead to lower emissions and, hence, welfare dominate permits. I then empirically examine these issues using evidence from a particulate permits market in Santiago, Chile.
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Bibliographic InfoPaper provided by Instituto de Economia. Pontificia Universidad Católica de Chile. in its series Documentos de Trabajo with number 278.
Date of creation: 2005
Date of revision:
Asymmetric information; imperfect monitoring; pollution markets; permits;
Find related papers by JEL classification:
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
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