An enduring issue in environmental regulation is whether to clean up existing “old” plants or in some manner to bring in new “clean” plants to replace the old. In this paper, a unit-level data base of emissions by nearly 2000 electric generating units from 1985 through 2002 is used to...

Tradable Permits – a Market-Based Allocation System for the Environment. Tradable Permits and Other Environmental Policy Instruments – Killing one Bird with two Stones. Tradable Permits – Ten Key Design Issues. Tradable Permits with Imperfect Monitoring. Emissions Trading with Greenhouse...

A tradeable permits market is said to be efficient when all affected firms trade permits until their marginal costs equal the market price. Detailed firm-level data are generally required to perform such an efficiency test, yet such information is rarely available. If firms face a declining...

We consider a market for storable pollution permits in which a large agent and a fringe of small agents gradually consume a stock of permits until they reach a long-run emissions limit. The subgame-perfect equilibrium exhibits no market power unless the large agent’s share of the initial stock...