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Markets of concentration permits: The case of manure policy

  • der Straeten, Bart Van
  • Buysse, Jeroen
  • Nolte, Stephan
  • Lauwers, Ludwig
  • Claeys, Dakerlia
  • Van Huylenbroeck, Guido
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    Concentration permits are regarded as an interesting policy tool for regulating emissions where, besides absolute amounts, also local concentration is important. However, effects of governance structure, trading system and possible policy interventions in the permits' allocation are not yet well analysed and understood. This paper explores in how far tradable fertilisation standards can be seen as a concentration permit trading (CPT) system which can be fine-tuned for further policy intervention. Indeed fertilisation standards such as obliged by the EU Nitrate Directive can be regarded as local nitrate emissions limits, and thus concentration permits. A multi-agent spatial allocation model is used to simulate the impact of defining the manure problem in terms of concentration permits rather than conventional emission permits. Impacts are simulated in terms of environmental performance and increased reallocation costs. The model is applied on the Flemish manure problem.

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    Article provided by Elsevier in its journal Ecological Economics.

    Volume (Year): 70 (2011)
    Issue (Month): 11 (September)
    Pages: 2098-2104

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    Handle: RePEc:eee:ecolec:v:70:y:2011:i:11:p:2098-2104
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    1. Buysse, Jeroen & Van der Straeten, Bart & Claeys, Dakerlia & Lauwers, Ludwig H. & Marchand, Fleur L. & Van Huylenbroeck, Guido, 2008. "Flexible quota constraints in positive mathematical programming models," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6640, European Association of Agricultural Economists.
    2. Y. Ermoliev & M. Michalevich & A. Nentjes, 2000. "Markets for Tradeable Emission and Ambient Permits: A Dynamic Approach," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 15(1), pages 39-56, January.
    3. Lacroix, Anne & Beaudoin, Nicolas & Makowski, David, 2005. "Agricultural water nonpoint pollution control under uncertainty and climate variability," Ecological Economics, Elsevier, vol. 53(1), pages 115-127, April.
    4. Ada Wossink & Cornelis Gardebroek, 2006. "Environmental Policy Uncertainty and Marketable Permit Systems: The Dutch Phosphate Quota Program," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(1), pages 16-27.
    5. Lauwers, L. & Van Huylenbroeck, G. & Martens, L., 1998. "A systems approach to analyse the effects of Flemish manure policy on structural changes and cost abatement in pig farming," Agricultural Systems, Elsevier, vol. 56(2), pages 167-183, February.
    6. Arild Vatn, 1998. "Input versus Emission Taxes: Environmental Taxes in a Mass Balance and Transaction Costs Perspective," Land Economics, University of Wisconsin Press, vol. 74(4), pages 514-525.
    7. Scott E. Atkinson & T. H. Tietenberg, 1987. "Economic Implications of Emissions Trading Rules for Local and Regional Pollutants," Canadian Journal of Economics, Canadian Economics Association, vol. 20(2), pages 370-86, May.
    8. A. Denny Ellerman & Nick Johnstone & Friedrich Schneider & Alexander F. Wagner & Juan-Pablo Montero & Johann Wackerbauer, 2003. "Tradable Permits," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 4(1), pages 3-32, October.
    9. Bruneau, Joel F., 2005. "Inefficient environmental instruments and the gains from trade," Journal of Environmental Economics and Management, Elsevier, vol. 49(3), pages 536-546, May.
    10. Kampas, Athanasios & White, Ben, 2003. "Selecting permit allocation rules for agricultural pollution control: a bargaining solution," Ecological Economics, Elsevier, vol. 47(2-3), pages 135-147, December.
    11. Stavins Robert N., 1995. "Transaction Costs and Tradeable Permits," Journal of Environmental Economics and Management, Elsevier, vol. 29(2), pages 133-148, September.
    12. Montgomery, W. David, 1972. "Markets in licenses and efficient pollution control programs," Journal of Economic Theory, Elsevier, vol. 5(3), pages 395-418, December.
    13. Bart Van der Straeten & Jeroen Buysse & Stephan Nolte & Ludwig Lauwers & Dakerlia Claeys & Guido Van Huylenbroeck, 2010. "A multi-agent simulation model for spatial optimisation of manure allocation," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 53(8), pages 1011-1030.
    14. Tom Tietenberg, 1995. "Tradeable permits for pollution control when emission location matters: What have we learned?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 5(2), pages 95-113, March.
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