Marketable Pollution Permits in Oligopolistic Markets with Transaction Costs

Marketable Pollution Permits in Oligopolistic Markets with Transaction Costs

Universal investment in markets with transaction costs

In this paper we formulate and solve the problem of universal growth optimal investment in two-asset discrete time markets with proportional transaction costs. We do not make any distributional assumptions on the market return sequences and construct a policy with growth rate at least as large as any interval policy. Since interval policies are 2-optimal for independent identically distributed ...

On Marketable Air-Pollution Permits: The Case for a System of Pollution Offsets

After examining the properties of several alternative forms of marketable permit systems for the control of air pollution, this paper proposes a system of pollution offsets as the most promising approach. Under the pollution-offset scheme, sources of emissions are free to trade emissions permits subject to the constraint of no violations of the predetermined air-quality standard at any receptor...

Simulating water markets with transaction costs

This paper presents an optimization model to simulate short-term pair-wise spot-market trading of surface water abstraction licenses (water rights). The approach uses a node-arc multicommodity formulation that tracks individual supplier-receiver transactions in a water resource network. This enables accounting for transaction costs between individual buyer-seller pairs and abstractor-specific r...

Marketable Permits for the Prevention of EnvironmentalDeterioration1

This paper develops a modified system of marketable emission permits that promises both savings in abatement costs to sources and improved environmental quality relative to an initial command-and-control (CAC) outcome. Using a model of TSP emissions for the Baltimore Air Quality Control Region (AQCR), a series of simulation exercises indicates that such a permit system could generate large cost...