This essay reviews the implementation experience with three main applications of tradable permit systems: air pollution control, water supply and fisheries management. Opening with a brief summary of the theory behind these programs and both the economic and environmental consequences...

We show that grandfathering fishing rights to local users or recognizing first possessions is more dynamically efficient than auctions of such rights. It is often argued that auctions allocate rights to the highest-valued users and thereby maximize resource rents. We counter that rents are not...

This essay reviews the implementation experience with three main applications of tradable permit systems: air pollution control, water supply and fisheries management. Opening with a brief summary of the theory behind these programs and both the economic and environmental consequences...

Economists have long established the cost effectiveness of cap and trade (CAT) owing to the cost heterogeneity between firms. I offer a new value of CAT: cost reduction within firms owing to productivity improvement and economies of scale. Overcoming the unobserved-cost challenge, I extend the...

This essay reviews the implementation experience with three main applications of tradable permit systems: air pollution control, water supply and fisheries management. Opening with a brief summary of the theory behind these programs and both the economic and environmental consequences...

The paper presents the results of an economic experiment in which the effects of fees on allocative efficiency of tradable utilization permits (e.g. pollution permits) are explored. Laboratory subjects (university students) play the roles of firms whose generic product requires a specific input...

Calling upon both positive and normative economics, we attempt to characterize the issues at stake in the current international negotiations on climatic change. We begin (section 2) by reviewing the main features of the Protocol. Then (Section 3), we identify by means of an elementary economic...

To meet their Kyoto targets under the Burden Sharing Agreement, most European countries plan to make use of the flexible project mechanisms "Clean Development Mechanism" (CDM) and "Joint Implementation" (JI). In addition, CDM and JI credits can be used by installations to fulfil their...

Linkage of different countries' domestic permit markets for pollution rights into a single international market alters governments' incentives, and may trigger adjustments of the number of allocated permits. First, this work finds that in a non-cooperative equilibrium, international emissions...