Enforcing Emissions Trading when Emissions Permits are Bankable
We propose enforcement strategies for emissions trading programs with bankable emissions permits that guarantee complete compliance with minimal enforcement costs. Our strategies emphasize imperfect monitoring supported by a high unit penalty for reporting violations, and tying this penalty directly to equilibrium permit prices. This approach is quite different from several existing enforcement strategies that emphasize high unit penalties for emissions in excess of permit holdings. Our analysis suggests that a high penalty for excess emissions cannot be used to conserve monitoring effort, and that it may actually increase the amount of monitoring necessary to maintain compliance. Copyright Springer Science+Business Media, Inc. 2005
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Volume (Year): 28 (2005)
Issue (Month): 2 (09)
Pages: 181-204
| Handle: | RePEc:kap:regeco:v:28:y:2005:i:2:p:181-204 |
| Contact details of provider: | Web page: http://www.springerlink.com/link.asp?id=100298
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References listed on IDEAS
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- Juan-Pablo Montero, 2002.
"The Temporal Efficiency of SO2 Emissions Trading,"
Documentos de Trabajo
225, Instituto de Economia. Pontificia Universidad Católica de Chile..
- Ellerman, A.D. & Juan-Pablo Montero, 2002. "The Temporal Efficiency of SO2 Emissions Trading," Cambridge Working Papers in Economics 0231, Faculty of Economics, University of Cambridge.
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