Advanced Search
MyIDEAS: Login

The Efficiency and Robustness of Allowance Banking in the U.S. Acid Rain Program

Contents:

Author Info

  • A. Denny Ellerman
  • Juan-Pablo Montero

Abstract

This paper provides an empirical evaluation of the efficiency of allowance banking (i.e., abating more in early periods in order to abate less in later periods) in the nationwide market for sulfur dioxide (SO2) emission allowances that was created by the U.S. Acid Rain Program. We develop a model of efficient banking, select appropriate parameter values, and evaluate the efficiency of observed temporal pattern of abatement based on aggregate data from the first eight years of the Acid Rain Program. Contrary to the general opinion that banking in this program has been excessive, we find that it has been reasonably efficient. We also show that this optimal banking program is robust to the errors in expectation that characterized the early years of this program; however, this property is due to design features that are unique to the U.S. Acid Rain Program.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://tisiphone.mit.edu/RePEc/mee/wpaper/2005-005.pdf
Our checks indicate that this address may not be valid because: 500 Can't connect to tisiphone.mit.edu:80 (10060). If this is indeed the case, please notify (Sharmila Ganguly)
Download Restriction: no

Bibliographic Info

Paper provided by Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research in its series Working Papers with number 0505.

as in new window
Length:
Date of creation: Mar 2005
Date of revision:
Handle: RePEc:mee:wpaper:0505

Contact details of provider:
Postal: 77 Massachusetts Ave. (Building E40-279), Cambridge, MA 02139-4307
Phone: (617) 253-3551
Fax: (617) 253-9845
Email:
Web page: http://tisiphone.mit.edu/RePEc
More information through EDIRC

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Wirl, Franz, 2009. "Oligopoly meets oligopsony: The case of permits," Journal of Environmental Economics and Management, Elsevier, vol. 58(3), pages 329-337, November.
  2. Stranlund, John K. & Murphy, James J. & Spraggon, John M., 2011. "An experimental analysis of compliance in dynamic emissions markets," Journal of Environmental Economics and Management, Elsevier, vol. 62(3), pages 414-429.
  3. Richard Schmalensee & Robert N. Stavins, 2013. "The SO 2 Allowance Trading System: The Ironic History of a Grand Policy Experiment," Journal of Economic Perspectives, American Economic Association, vol. 27(1), pages 103-22, Winter.
  4. Boutabba, Mohamed Amine & Beaumais, Olivier & Lardic, Sandrine, 2012. "Permit price dynamics in the U.S. SO2 trading program: A cointegration approach," Energy Economics, Elsevier, vol. 34(3), pages 714-722.
  5. Färe, Rolf & Grosskopf, Shawna & Pasurka,, Carl A., 2013. "Tradable permits and unrealized gains from trade," Energy Economics, Elsevier, vol. 40(C), pages 416-424.
  6. Richard Schmalensee & Robert Stavins, 2012. "The SO2 Allowance Trading System: The Ironic History of a Grand Policy Experiment," NBER Working Papers 18306, National Bureau of Economic Research, Inc.
  7. Matti Liski & Juan Pablo Montero, 2008. "Market power in an exhaustible resource market: The case of storable pollution permits," Documentos de Trabajo 329, Instituto de Economia. Pontificia Universidad Católica de Chile..
  8. Benjamin Leard, 2013. "The Welfare Effects of Allowance Banking in Emissions Trading Programs," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 55(2), pages 175-197, June.
  9. Mohamed Amine Boutaba, 2009. "Investigating efficiency in the U.S sulfur dioxide permit market," Economics Bulletin, AccessEcon, vol. 29(2), pages 1308-1319.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:mee:wpaper:0505. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sharmila Ganguly) The email address of this maintainer does not seem to be valid anymore. Please ask Sharmila Ganguly to update the entry or send us the correct address.

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.