We evaluate the performance of an environmental market in a less developed country based on the experience from Santiago-Chile's particulate matter control program. We find that grandfathering the permits has created economic incentives for incumbent sources to more readily declare their...

Output-based allocations (OBAs) are typically used in emission trading schemes to mitigate leakage in sectors at risk. Recent work has shown they may also help to stabilize prices in markets subject to supply and demand shocks. We extend previous work to simultaneously include both leakage and...