To address many of the environmental challenges that face us today, including climate change, countries are striving to deploy efficient and effective tools for environmental management at the national level. Tradable/transferable permits are one such tool. What are the key design parameters for...

There is a tendency among policy-makers and industry lobbyists toward "specific", "relative" or "output-based" quotas, i.e., freely distributed to firms proportionally to their output. With a stochastic analytical model, we demonstrate that relative quotas are dominated either by absolute quotas...