In this paper, we develop a formal model that combines point-source emitters of waste, with landholders that can provide pollution-offset activities, in one ‘environment economy’. We use the model to demonstrate the societal benefits of such a system relative to a stand-alone tradable permit...

Market based mechanisms are growing in importance in environmental policy making. In theory market based mechanisms equate marginal abatement costs between polluting sources, thereby allocating emissions control responsibility at least cost. The step from theory to field implementation is,...

Experiments in economics and their application to policy design continue to gain increasing popular appeal. Australia is investing in training, capacity building and international partnerships to bring these skills to our policy makers. Economic experiments are used to test policy-related...

In theory, competitive emission permit markets minimise total abatement cost for any emission ceiling. Permit markets are often imperfectly competitive, however, if they are thin and dominated by large firms. The dominant firm(s) could exercise market power and increase other firms’ costs of...

The efficiency implications of different property right allocations when two environmental goods can be produced under the condition of economies of scope are analysed. It is assumed that an environmental agency - acting on behalf of the community - employs an auction-based mechanism to buy...