Designing Organizations for Trading Pollution Rights
AbstractRegulators and academicians have recently become interested in using a marketable permits program as a new way to control aggregate pollution emissions. Our research focuses on choosing a permit trading mechanism that is both economically efficient and politically viable. We consider an organized trading process and a revenue neutral auction, both of which involve an initial allocation of permits based on past history. Each is tested in a non-monopolistic and monopolistic environment to determine which mechanism performs best. The results suggest that, overall, the organized trading process outperforms the revenue neutral auction.
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Bibliographic InfoPaper provided by EconWPA in its series Experimental with number 9307001.
Date of creation: 26 Jul 1993
Date of revision: 28 Jul 1993
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Find related papers by JEL classification:
- C9 - Mathematical and Quantitative Methods - - Design of Experiments
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