We study the impacts of bankruptcy risk on markets for tradable environmental and natural resource permits. We show that bankruptcy risk in a competitive market for tradable permits causes an inefficient distribution of these permits among firms. Moreover, the equilibrium distribution of permits...

We study the impacts of bankruptcy risk on markets for tradable environmental and natural resource permits. We show that bankruptcy risk in a competitive market for tradable permits causes an inefficient distribution of these permits among firms. Moreover, the equilibrium distribution of permits...

Under reasonable conditions, noncompliance with an emissions tax has no effect on environmental outcomes or the efficient allocation of individual emissions control. Moreover, differences in individual tax violations are independent of firm-level differences. All of these desirable...