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Bankable Pollution Permits under Uncertainty and Optimal Risk Management Rules: Theory and Empirical Evidence

Author

Listed:
  • Julien Chevallier
  • Johanna Etner
  • Pierre-André Jouvet

Abstract

An increase in the demand for agricultural goods leads to the use of more intensive cultivation methods. Though Ricardo sees no difficulties in the intensification process, their existence is revealed by the possible occurrence of multiple equilibria. A general theory of intensive rent is based on a formal parallel with single-product systems without land.

Suggested Citation

  • Julien Chevallier & Johanna Etner & Pierre-André Jouvet, 2008. "Bankable Pollution Permits under Uncertainty and Optimal Risk Management Rules: Theory and Empirical Evidence," EconomiX Working Papers 2008-25, University of Paris Nanterre, EconomiX.
  • Handle: RePEc:drm:wpaper:2008-25
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    File URL: http://economix.fr/pdf/dt/2008/WP_EcoX_2008-25.pdf
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    References listed on IDEAS

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    1. Kimball, Miles S, 1990. "Precautionary Saving in the Small and in the Large," Econometrica, Econometric Society, vol. 58(1), pages 53-73, January.
    2. Emilie Alberola & Julien Chevallier, 2009. "European Carbon Prices and Banking Restrictions: Evidence from Phase I (2005-2007)," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 51-80.
    3. Stavins, Robert, 2004. "Environmental Economics," Discussion Papers dp-04-54, Resources For the Future.
    4. Ben-David, Shaul & Brookshire, David S. & Burness, Stuart & McKee, Michael & Schmidt, Christian, 1999. "Heterogeneity, Irreversible Production Choices, and Efficiency in Emission Permit Markets," Journal of Environmental Economics and Management, Elsevier, vol. 38(2), pages 176-194, September.
    5. Emilie Alberola & Benoît Chèze & Julien Chevallier, 2008. "The EU Emissions Trading Scheme : Disentangling the Effects of Industrial Production and CO2 Emissions on Carbon Prices," EconomiX Working Papers 2008-12, University of Paris Nanterre, EconomiX.
    6. Kling, Catherine & Rubin, Jonathan, 1997. "Bankable permits for the control of environmental pollution," Journal of Public Economics, Elsevier, vol. 64(1), pages 101-115, April.
    7. Bosetti, Valentina & Carraro, Carlo & Massetti, Emanuele, 2009. "Banking permits: Economic efficiency and distributional effects," Journal of Policy Modeling, Elsevier, vol. 31(3), pages 382-403, May.
    8. Christian Gollier, 2004. "The Economics of Risk and Time," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262572249, January.
    9. Paul Leiby & Jonathan Rubin, 2001. "Intertemporal Permit Trading for the Control of Greenhouse Gas Emissions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 19(3), pages 229-256, July.
    10. David M. Newbery, 2008. "Climate Change Policy and Its Effect on Market Power in the Gas Market," Journal of the European Economic Association, MIT Press, vol. 6(4), pages 727-751, June.
    11. 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.
    12. repec:dau:papers:123456789/4223 is not listed on IDEAS
    13. Rubin, Jonathan D., 1996. "A Model of Intertemporal Emission Trading, Banking, and Borrowing," Journal of Environmental Economics and Management, Elsevier, vol. 31(3), pages 269-286, November.
    14. Cropper, Maureen L & Oates, Wallace E, 1992. "Environmental Economics: A Survey," Journal of Economic Literature, American Economic Association, vol. 30(2), pages 675-740, June.
    15. Bohm, Peter & Russell, Clifford S., 1985. "Comparative analysis of alternative policy instruments," Handbook of Natural Resource and Energy Economics,in: A. V. Kneese† & J. L. Sweeney (ed.), Handbook of Natural Resource and Energy Economics, edition 1, volume 1, chapter 10, pages 395-460 Elsevier.
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    Cited by:

    1. repec:dau:papers:123456789/10237 is not listed on IDEAS
    2. Christian de Perthuis & Raphaël Trotignon, 2013. "The European CO2 allowances market: issues in the transition to Phase III," Chapters,in: Handbook on Energy and Climate Change, chapter 23, pages 500-520 Edward Elgar Publishing.
    3. Julien Chevallier, 2010. "The European carbon market (2005-2007): banking, pricing and risk-hedging strategies," Working Papers halshs-00458787, HAL.
    4. Julien Chevallier, 2009. "Intertemporal Emissions Trading and Market Power: A Dominant Firm with Competitive Fringe Model," Working Papers halshs-00388207, HAL.
    5. Christian De Perthuis & Raphaël Trotignon, 2017. "Marché européen des quotas de CO2 : Les enjeux du passage à la phase 3," Working Papers hal-01504990, HAL.

    More about this item

    Keywords

    Firm behavior; Tradable permits; Policy risk; EU ETS;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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