We attempt to design a market framework (which we call ECOSEL) for private provision of forest ecosystem services. ECOSEL is a non-regulatory framework that uses a voluntary public good provision mechanism (in a form of an auction) in conjunction with a multiobjective optimization algorithm to...

In this paper, we examine the design of permit trading programs when the objective is to minimize the cost of achieving an ex ante pollution target, that is, one that is defined in expectation rather than an ex post deterministic value. We consider two potential sources of uncertainty, the...

The optimal pollution permit trading system is examined when the regulator, faced with incomplete information on firms’' abatement costs and delivery coefficients, seeks to minimize expected total abatement costs to meet an ex ante pollution target. Intuitively, we find that the optimal trading...