We review the literature on bankable emission permits which has developed over the last two decades. Most articles analyze either theoretical or simulation models. The theoretical literature considers the problem of minimizing the discounted sum of social costs and the possibility of...

We review the literature on bankable emissions permits that has developed over the last two decades. Most articles analyze either theoretical or simulation models. The theoretical literature considers the problem of minimizing the discounted sum of social costs and the possibility of...

Virtually every analysis of cap-and-trade programs assumes that firms must surrender permits as they pollute. However, no program, existing or proposed, requires such continual compliance. Some (e.g. the Acid Rain Program limiting SO2 emissions) require compliance once a year; others (e.g. the...

In theory, how a fixed number of storable pollution permits are allocated in a cap-and-trade program should not affect intertemporal prices unless participants fail to receive permit endowments before they plan to use them. "Backloading" can create inefficiency; "frontloading" cannot. The...

Previous analyses assumed that firms must surrender permits as they pollute. If so, then the price of permits may remain constant over measurable intervals if the government injects additional permits at a ceiling price or may even collapse if more permits are injected through an auction...