EPA’s New Emissions Trading Mechanism: A Laboratory Evaluation
نویسندگان
چکیده
The EPA has designed a new call auction institution for trading allowances to emit sulfur dioxide. This paper reports twelve laboratory markets that evaluate the performance of this new institution relative to the more commonly observed uniform price call auction. We find Ž . Ž . that the uniform price call auction i is more efficient, ii induces more truthful revelation of Ž . Ž . underlying values and costs, iii provides more accurate price information, and iv is more responsive to changes in underlying market conditions. Under the EPA auction rules both buyers and sellers misrepresent their true value of the emission permits, which biases market-clearing prices downward. Q 1996 Academic Press, Inc.
منابع مشابه
Markets for Pollution Allowances : What Are the ( New ) Lessons ?
A bout 45 years ago a few economists offered the novel idea of trading pollution rights as a way of meeting environmental goals. Such trading was touted as a more cost-effective alternative to traditional forms of regulation, such as specifi c technology requirements or performance standards. The principal form of trading in pollution rights is a cap-and-trade system, a system whose essential e...
متن کاملNew directions in emissions trading: the potential contribution of new institutional economics
Once an arcane topic even among environmental economists, emissions trading systems have substantially increased during this past decade in the USA. Moreover, the implementation of these systems has necessitated increased involvement of professionals in many fields besides economics. This paper reviews the practical experience of the six major types of emissions trading systems, focusing on cre...
متن کاملEconomic and environmental performance analysis of Polish energy companies
The tightening of the European Union climate and energy policy, directed to raising the resilience and effectiveness of the European Union Emissions Trading System, may influence on companies' economic performance. Polish energy companies, which mainly use coal in the energy production process, are particularly worried about the potential negative consequences associated with the implementation...
متن کاملPrice Discovery and Intermediation in Linked Emissions Trading Markets : A Laboratory Study
Many new and proposed emissions trading systems involve multiple countries and regions. The introduction of interregional trading raises questions about how flexible stateor national-level authorities should be in allowing individual firms to trade with firms or authorities in other states or countries. This paper uses laboratory methods to evaluate the efficiency and pricing performance of lin...
متن کاملThe design and implementation of an international trading scheme for greenhouse gas emissions
The inclusion of emissions trading in the Kyoto Protocol reflects an important decision to address climate change issues through flexible market mechanisms. In this paper, we address a number of policy issues that must be considered in designing and implementing an international greenhouse gas (GHG) emissions trading scheme. These include how much of a Party’s assigned amount of GHG emissions c...
متن کامل