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
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Juan-Pablo Montero, 2002.
"The Temporal Efficiency of SO2 Emissions Trading,"
Documentos de Trabajo
225, Instituto de Economia. Pontificia Universidad Católica de Chile..
When requesting a correction, please mention this item's handle: RePEc:kap:regeco:v:28:y:2005:i:2:p:181-204. 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: (Guenther Eichhorn)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.