The addition of sulfur dioxide is a longstanding and common practice in the winemaking industry. Sulfur dioxide preserves wine, preventing oxidation and browning. However, in the US, wine labeled as organic cannot contain added sulfur dioxide. A petition put forth to the National Organic...

We study long-term incentives for polluting and regulated firms to invest in advanced abatement technologies, when some new technology is available but an even better technology will be expected in the future. Firms can invest only once. We find that depending on the adoption fixed costs all...

Tradable permits have already been applied in many areas of environmental policy and may be a possible response to increasing calls for flexible conservation instruments which are able to successfully conserve biodiversity while allowing for economic development. The idea behind applying...

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...

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 estimate a structural model of OECD countries in which GDP and CO2 emissions are endogenous. We use the estimated model to simulate the price of tradable CO2 permits and the efficiency gains from trade. Our estimated prices are high, relative to previous estimates, and the efficiency gains...

This paper reports an experiment that studies the behavior of a monopolist on sequential auction markets for tradable permits. Using six sessions in a triple ABA crossover design, we investigate the cost-effectiveness of permit allocations and the division of trade gains on sequential bid,...

We investigate a central issue in the climate change debate associated with the Kyoto Protocol: the likely performance of international greenhouse gas trading mechanisms. Virtually all design studies and many projections of the costs of meeting the Kyoto targets have assumed that an...