We study potential equilibria in California's cap-and-trade market for greenhouse gases (GHGs) based on information available before the market started. We find large ex ante uncertainty in business-as-usual emissions and in the abatement that might result from non-market policies, much larger...

We categorize the primary incentive-based mechanisms under consideration for addressing greenhouse gas emissions from electricity generation--pricing carbon, setting intensity standards, and subsidizing clean energy--and compare their market outcomes under similar expansions of clean electricity...