In this paper, we investigate the effect of market power on equilibrium path of an emission permits market in which firms can bank current permits for use in later periods. In particular, we study the market equilibrium for a large (potentially dominant) firm and competitive fringe with rational...

This paper studies firms’ incentives to invest in environmental R&D under different market structures (Cournot and Bertrand) and environmental policy instruments (emission standards, taxes, tradable permits and auctioned permits). Because of market strategic effects, R&D incentives vary widely...

I explore the advantages of tradable emission permits over uniform emission standards when the regulator has incomplete information on firms’ emissions and costs of production and abatement (e.g., air pollution in large cities). Because the regulator only observes each firm’s abatement...

This paper provides an empirical evaluation of the temporal efficiency of the U.S. Acid Rain Program, which implemented a nationwide market for trading and banking sulfur dioxide (SO2) emission allowances. We first develop a model of efficient banking and select appropriate parameter values....

Una de las dificultades que enfrentan las autoridades regulatorias en el diseño de políticas eficientes para la protección y preservación de recursos comunes (v.gr., calidad del aire, calidad del agua, cuerpos de agua, pesquerías) es que gran parte de la información relevante para el...

El proyecto de “ley corta” de electricidad propone importantes modificaciones a la actual regulación de la transmisión eléctrica en Chile. En este artículo desarrollamos un modelo simple para analizar dos de las propuestas centrales del proyecto: (i) el traspaso directo de parte de los...

Policy makers in different parts of the world are paying more attention to environmental markets (i.e., tradeable emission permits markets) as an alternative to the traditional command-and-command control approach of setting uniform emission and technology standards. I extend the basic (perfect...

Policy makers in different parts of the world are paying more attention to environmental markets (i.e., tradeable permits markets) as an alternative to the traditional command-and-command control approach of setting uniform emission and technology standards. I extend the basic (perfect...

This paper provides an empirical evaluation of the temporal efficiency of the US Acid Rain Program, which implemented a nationwide market for trading and banking sulphur dioxide (SO2) emission allowances. We first develop a model of efficient banking and select appropriate parameter values. Then...