Tradable Discharge Permits: Restrictions on Least-Cost Solutions

摘要: Conceptually, tradable discharge permit systems have the potential to yield least-cost solution achieve ambient standards. Empirical evidence indicates that command-and-control solutions are substantially less cost-effective. Despite this, few emissions trades been made in USA or Europe. This paper attempts explain this phenomenon by measuring substantial reductions cost savings due restrictions on local environmental degradation, generation of externalities, and nature real-world trading permits. We model effects zonal trading, rules, limits acid deposition, as well bilateral sequential actual trades. also examine compromise recoup some these losses. Schemes optimally sequence capture only an system. However, system based single worst receptor preserves most a full For any systems, permits will likely need be grandfathered satisfy equity concerns.