What Can We Learn from the Grand Policy Experiment? Lessons from SO2 Allowance Trading

Stavins, Robert N.

doi:10.1257/jep.12.3.69

Cited by 608 publications

(275 citation statements)

References 16 publications

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“…The success of tradable pollution permit programs at meeting air quality standards for regional air pollutants at minimum cost has encourage policy makers and academics to find ways of creating marketable instruments that can be readily applied to land uses (see e.g., Stavins, 1998). Limits do exist, however, in transferring the idea of the standard tradable air pollution permit policy to control land uses.…”

Section: Concluding Commentmentioning

confidence: 99%

Tradable Set-Aside Requirements (TSARs): Conserving Spatially Dependent Environmental Amenities

Parkhurst

Shogren

Crocker

2014

Environ Resource Econ

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In the lab, we examine the effectiveness of two land use conservation policies: a tradable set aside requirements (TSARs), and the TSARs combined with an agglomeration bonus. Evaluated by bioeconomic efficiency, our experimental results suggest: 1) TSARs is a cost-effective land conservation tool; and 2) combining TSARS with the agglomeration bonus increases habitat connectivity but at a price-lower economic efficiency. * Thanks to the USDA, and the UW Stroock and Bugas funds for partial financial support. Shogren thanks the Norwegian University of Life Sciences for their support while working on this project. Additional thanks to Travis Warziniack and students at the University of Wyoming for insightful comments and discussions.2

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Section: Concluding Commentmentioning

confidence: 99%

Tradable Set-Aside Requirements (TSARs): Conserving Spatially Dependent Environmental Amenities

Parkhurst

Shogren

Crocker

2014

Environ Resource Econ

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“…5 Experience has validated the political importance of this property. For example, in the Senate debate over the Clean Air Act Amendments of 1990, "bonus allowances" were awarded to electricity generators in Ohio, which were going to incur particularly high costs because of their reliance on high-sulfur coal Stavins 1998); the result was the key support of Senator John Glenn (D-Ohio) for the legislation. This pattern should be contrasted with most public policy proposals -environmental or otherwise -for which the normal course of events is that the political machinations that are necessary to develop sufficient legislative support reduce the effectiveness of the policy and/or drive up its costs.…”

Section: The Fundamentals Of Cap-and-tradementioning

confidence: 99%

The Effect of Allowance Allocations on Cap-and-Trade System Performance

Hahn

Stavins

2011

The Journal of Law and Economics

121

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We examine an implication of the "Coase Theorem" which has had an important impact both on environmental economics and on public policy in the environmental domain. Under certain conditions, the market equilibrium in a cap-and-trade system will be cost-effective and independent of the initial allocation of tradable rights. That is, the overall cost of achieving a given aggregate emission reduction will be minimized, and the final allocation of permits will be independent of the initial allocation. We call this the independence property. This property is very important because it allows equity and efficiency concerns to be separated in a relatively straightforward manner. In particular, the property means that the government can establish the overall pollution-reduction goal for a cap-and-trade system by setting the cap, and leave it up to the legislature -such as the U.S. Congress -to construct a constituency in support of the program by allocating the allowances to various interests without affecting either the environmental performance of the system or its aggregate social costs. Our primary objective in this paper is to examine the conditions under which the independence property is likely to hold -both in theory and in practice. A number of factors can call the independence property into question theoretically, including market power, transaction costs, non-cost-minimizing behavior, and conditional allowance allocations. We find that, in practice, there is support for the independence property in some, but not all cap-and-trade applications.

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“…The usual argument to support grandfathering is that while inefficient, is it provides greater political control over the distributional effects of regulation (Stavins 1997).…”

Section: Emissions Permitsmentioning

confidence: 99%

Identification of Options and Policy Instruments for the Internalisation of External Costs of Electricity Generation. Dissemination of External Costs of Electricity Supply Making Electricity External Costs Known to Policy-Makers MAXIMA

Markandya

Longo

2005

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Identification of Options and Policy Instruments for the Internalisation of External Costs of Electricity Generation Dissemination of External Costs of Electricity Supply Making Electricity External Costs Known to Policy-Makers -MAXIMA SummaryIn the present paper, after reviewing the results of the ExternE project and its follow-up stages in the estimation of the external costs of electricity production, we look at the policy instruments for the internalisation of such costs. Emphasis is given to subsidies, such as feed-in tariffs, competitive bidding processes and tradable green certificates to stimulate the use of renewables in the production of electricity. When policy-makers are asked to choose the instrument(s) to internalise the externalities in the electricity production, they have to find a solution that gives the best outcome in terms of efficiency, cost minimisation, impact on the job market, security of energy supply, equity of the instrument, technological innovation, certainty of the level of the internalisation, and feasibility. The choice of the instrument will require some trade-offs among these criteria. Conjoint choice analysis can help in investigating how stakeholders and policy makers trade off the criteria when choosing a policy for the internalisation of the externalities. In this paper we present the first results of a questionnaire that employs conjoint choice questions to find out how policy makers and stakeholders of the electricity market trade off some socio-economic aspects in the selection of the policy instruments for the internalisation of the externalities. The results of this first set of interviews will be useful for further research.

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What Can We Learn from the Grand Policy Experiment? Lessons from SO2 Allowance Trading

Cited by 608 publications

References 16 publications

Tradable Set-Aside Requirements (TSARs): Conserving Spatially Dependent Environmental Amenities

Tradable Set-Aside Requirements (TSARs): Conserving Spatially Dependent Environmental Amenities

The Effect of Allowance Allocations on Cap-and-Trade System Performance

Identification of Options and Policy Instruments for the Internalisation of External Costs of Electricity Generation. Dissemination of External Costs of Electricity Supply Making Electricity External Costs Known to Policy-Makers MAXIMA

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