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Title: Heterogeneity, irreversible production choices, and efficiency in emission permit markets

Abstract

This paper investigates a class of market mechanisms for environmental regulation based on the Clean Air Act tradable discharge permit program. Laboratory market experiments capture some of the more salient institutional features and focus on issues of firm technological heterogeneity and irreversible investment regarding the operation of the permit market. Experimental results suggest that higher degrees of abatement cost heterogeneity may lead to reduced trade volume, while the implications of increased cost heterogeneity regarding price volatility are mixed. Finally, increased cost heterogeneity appears to result in decreased laboratory efficiency.

Authors:
; ; ; ;  [1]
  1. Univ. of New Mexico, Albuquerque, NM (United States). Dept. of Economics
Publication Date:
Sponsoring Org.:
Electric Power Research Inst., Palo Alto, CA (United States)
OSTI Identifier:
687374
Resource Type:
Journal Article
Journal Name:
Journal of Environmental Economics and Management
Additional Journal Information:
Journal Volume: 38; Journal Issue: 2; Other Information: PBD: Sep 1999
Country of Publication:
United States
Language:
English
Subject:
54 ENVIRONMENTAL SCIENCES; 56 BIOLOGY AND MEDICINE, APPLIED STUDIES; AIR POLLUTION; EMISSION; AIR POLLUTION ABATEMENT; LICENSES; MARKET; CLEAN AIR ACTS; INVESTMENT; COST; POLLUTION REGULATIONS

Citation Formats

Ben-David, S., Brookshire, D.S., Burness, S., McKee, M., and Schmidt, C. Heterogeneity, irreversible production choices, and efficiency in emission permit markets. United States: N. p., 1999. Web. doi:10.1006/jeem.1999.1080.
Ben-David, S., Brookshire, D.S., Burness, S., McKee, M., & Schmidt, C. Heterogeneity, irreversible production choices, and efficiency in emission permit markets. United States. doi:10.1006/jeem.1999.1080.
Ben-David, S., Brookshire, D.S., Burness, S., McKee, M., and Schmidt, C. Wed . "Heterogeneity, irreversible production choices, and efficiency in emission permit markets". United States. doi:10.1006/jeem.1999.1080.
@article{osti_687374,
title = {Heterogeneity, irreversible production choices, and efficiency in emission permit markets},
author = {Ben-David, S. and Brookshire, D.S. and Burness, S. and McKee, M. and Schmidt, C.},
abstractNote = {This paper investigates a class of market mechanisms for environmental regulation based on the Clean Air Act tradable discharge permit program. Laboratory market experiments capture some of the more salient institutional features and focus on issues of firm technological heterogeneity and irreversible investment regarding the operation of the permit market. Experimental results suggest that higher degrees of abatement cost heterogeneity may lead to reduced trade volume, while the implications of increased cost heterogeneity regarding price volatility are mixed. Finally, increased cost heterogeneity appears to result in decreased laboratory efficiency.},
doi = {10.1006/jeem.1999.1080},
journal = {Journal of Environmental Economics and Management},
number = 2,
volume = 38,
place = {United States},
year = {1999},
month = {9}
}