The optimal size of a permit market

Krysiak, Frank C.; Schweitzer, Patrick

doi:10.1016/j.jeem.2010.05.001

Cited by 12 publications

(18 citation statements)

References 25 publications

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“…The first type aimed at reaching quality standards at a minimum cost (Atkinson & Lewis, 1974;Destandau & Nafi, 2009Montgomery, 1972;O'Ryan, 2006), and the second type maximized the net social benefit, including total abatement costs and environmental damage, or the benefit of the pollution removed (Cabe & Herriges, 1990;Henderson, 1977;Howe & Lee, 1983;Kolstad, 1987;Krysiak & Schweitzer, 2010;Mendelsohn, 1986;Tietenberg, 1974;Wu & Babcock, 2001). …”

Section: Introductionmentioning

confidence: 99%

“…As for partial discrimination, the factors that influence the degree of spatial discrimination (optimum number of zones) have been especially studied in the particular case of 'hot spot' risk, following the establishment of tradable permits (Krysiak & Schweitzer, 2010). The damage depends on the location of buyers and sellers.…”

Section: Introductionmentioning

confidence: 99%

“…Finally, Krysiak and Schweitzer (2010) were inspired by the model of Williams III, but added an uncertainty as to the spatial location of two types of polluters: "dirty" or "clean". Since both of these categories of polluters have parallel linear marginal abatement costs, only the original ordinate changes.…”

Section: Introductionmentioning

confidence: 99%

“…Without knowledge of the location of pollution emitters, the breakdown into exchange zones is done exogenously, in contrast with Williams III, based on a homogeneous breakdown of the space. Krysiak and Schweitzer (2010) concluded that the breakdown of space is more interesting when the ratio between the slope of the marginal cost and the marginal damage is small.…”

Section: Introductionmentioning

confidence: 99%

“…Compare to the existing literature, the innovation of this study is triple: (1) first, the impact of the slope of the environmental benefit function is studied independently of the transfer coefficients, contrary to Kolstad (1987) and Williams III (2008); (2) second, the originality of this paper is to simultaneously study the discrimination by comparing perfect discrimination and uniform control, and by calculating the optimal number of zones in partial discrimination; and (3) third, in partial discrimination, in contrast to Krysiak and Schweitzer (2010), the combination {zone, effort per zone} will be determined endogenously using the methodology of Destandau and Point (2000).…”

Section: Introductionmentioning

confidence: 99%

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Impact of the Benefit Function Slope on the Advantage of Spatially Discriminating the Pollution Abatement Effort

Destandau¹

2013

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Many articles have dealt with the advantages of spatially discriminating the abatement effort when the pollution is non-uniformly mixed. However, few authors have attempted to identify the impact of certain model parameters on the advantage of this discrimination. These parameters are the transfer coefficients, the parameters of the abatement cost function or the level of the quality standard. In this article, we studied the role of the slope of the environmental benefit function on the advantages of spatially discriminating pollution abatement efforts. It appears that the relative increase in the net social benefit between a uniform and a perfectly discriminated control is not affected by this slope. However, in the case of partial discrimination, a steeper benefit slope increases the optimal number of zones.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Impact of the Benefit Function Slope on the Advantage of Spatially Discriminating the Pollution Abatement Effort

Destandau¹

2013

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Optimizing the scale of markets for water quality trading

Doyle

Patterson²,

Chen

et al. 2014

Water Resources Research

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Applying market approaches to environmental regulations requires establishing a spatial scale for trading. Spatially large markets usually increase opportunities for abatement cost savings but increase the potential for pollution damages (hot spots), vice versa for spatially small markets. We develop a coupled hydrologic-economic modeling approach for application to point source emissions trading by a large number of sources and apply this approach to the wastewater treatment plants (WWTPs) within the watershed of the second largest estuary in the U.S. We consider two different administrative structures that govern the trade of emission permits: one-for-one trading (the number of permits required for each unit of emission is the same for every WWTP) and trading ratios (the number of permits required for each unit of emissions varies across WWTP). Results show that water quality regulators should allow trading to occur at the river basin scale as an appropriate first-step policy, as is being done in a limited number of cases via compliance associations. Larger spatial scales may be needed under conditions of increased abatement costs. The optimal scale of the market is generally the same regardless of whether one-for-one trading or trading ratios are employed.

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Emission trading for air pollution hot spots: getting the permit market right

Antweiler

2015

Environ Econ Policy Stud

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The optimal size of a permit market

Cited by 12 publications

References 25 publications

Impact of the Benefit Function Slope on the Advantage of Spatially Discriminating the Pollution Abatement Effort

Impact of the Benefit Function Slope on the Advantage of Spatially Discriminating the Pollution Abatement Effort

Optimizing the scale of markets for water quality trading

Emission trading for air pollution hot spots: getting the permit market right

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