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Trading Programs for Environmental Management: Reflections on the Air and Water Experiences

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Abstract

Emission and effluent trading programs are increasingly being advocated for the nation’s air and water quality programs. However important distinctions must be drawn between credit and allowance trading, based on how much decision-making authority is transferred from regulators to dischargers. Credit trading programs are extensions of command-and-control regulation. Allowance trading programs, like markets, decentralize decisions on the means to control discharges and the location of that control. A review of existing trading programs finds allowance trading programs stimulate more aggressive pollution prevention behavior and result in lower compliance costs than credit trading.

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File URL: http://econ.ccps.virginia.edu/RePEc_docs/ceps_docs/Trading_Experience-ceps-wp0201.pdf
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Bibliographic Info

Paper provided by Center for Economic and Policy Studies in its series Working Papers with number 2002-01.

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Length: 25 pages
Date of creation: 05 Jan 2002
Date of revision:
Publication status: Published
Handle: RePEc:vac:wpaper:wp02-01

Note: Paper published as: Shabman, Leonare, Kurt Stephenson, and William Shobe. “Trading Programs for Environmental Management: Reflections on the Air and Water Experiences.” Environmental Practice 4, no. 3 (September 2002): 153-162.
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Related research

Keywords: emission trading; environmental policy;

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Citations

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Cited by:
  1. Coria, Jessica & Sterner, Thomas, 2008. "Tradable Permits in Developing Countries: Evidence from Air Pollution in Santiago, Chile," Discussion Papers dp-08-34-efd, Resources For the Future.
  2. Shortle, James, 2013. "Economics and Environmental Markets: Lessons from Water-Quality Trading," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 42(1), April.
  3. A. Ellerman, 2005. "A Note on Tradeable Permits," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 31(2), pages 123-131, 06.
  4. Stephenson, Kurt & Aultman, Stephen & Shabman, Leonard A., 2006. "An Evaluation of the Virginia Nutrient Credit Trading Program," 2006 Annual meeting, July 23-26, Long Beach, CA 21071, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  5. Shabman, Leonard & Scodari, Paul, 2004. "Past, Present, and Future of Wetlands Credit Sales," Discussion Papers dp-04-48, Resources For the Future.
  6. Stephenson, Kurt & Bosch, Darrell J., 2003. "Nonpoint Source And Carbon Sequestration Credit Trading: What Can The Two Learn From Each Other?," 2003 Annual meeting, July 27-30, Montreal, Canada 22229, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  7. Sheila M. Olmstead, 2010. "The Economics of Water Quality," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 4(1), pages 44-62, Winter.
  8. Hanna L. Breetz & Karen Fisher-Vanden & Hannah Jacobs & Claire Schary, 2005. "Trust and Communication: Mechanisms for Increasing Farmers’ Participation in Water Quality Trading," Land Economics, University of Wisconsin Press, vol. 81(2).
  9. Fang, Feng & Easter, K. William, 2003. "Pollution Trading To Offset New Pollutant Loadings -- A Case Study In The Minnesota River Basin," 2003 Annual meeting, July 27-30, Montreal, Canada 22135, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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