Emissions Trading

by Tietenberg, Thomas H.

• ISBN13: 9781933115313
• ISBN10: 1933115319
• Edition: 2nd
• Format: Paperback
• Copyright: 2006-02-15
• Publisher: Resources for the Future

Summary

First published in 1985, Emissions Trading was a comprehensive review of the first large-scale attempt to use economic incentives in environmental policy in the U.S. and of the empirical and theoretical research on which this approach is based. Since its publication it has consistently been one of the most widely cited works in the tradable permits literature. The second edition of this classic study of pollution reform considers how the use of transferable permits to control pollution has evolved, looks at how these programs have been implemented in the U.S. and internationally, and offers an objective evaluation of the resulting successes, failures, and lessons learned over the last twenty-five years.

Author Biography

T. H. Tietenberg is the Mitchell Family Professor of Economics at Colby College in Waterville, Maine

Table of Contents

Figures and Tables	vii
Preface	ix
Abbreviations	xi
Introduction	1	(24)
Early History	2	(3)
Describing the Evolution	5	(1)
The Evolution of Emissions Trading	6	(11)
The Evolution of Design Features	17	(4)
An Overview of the Book	21	(4)
The Conceptual Framework	25	(23)
The Regulatory Dilemma	25	(1)
The Cost-Effectiveness Framework	25	(2)
Cost-Effective Permit Markets	27	(13)
The Role of Transactions Costs	40	(2)
The Role of Administrative Costs	42	(1)
The Role of Technical Change	43	(2)
Summary	45	(3)
The Consequences of Emissions Trading	48	(27)
The Nature of the Evidence	49	(6)
Ex Ante Evaluations: The Evidence	55	(5)
Ex Post Evaluations: The Evidence	60	(12)
Summary	72	(3)
The Spatial Dimension	75	(32)
Difficulties in Implementing an Ambient Permit System	75	(3)
Possible Alternatives	78	(24)
Summary	102	(5)
The Temporal Dimension	107	(20)
Borrowing, Banking, and the Nature of the Environmental Target	107	(1)
Linking Emissions and Pollutant Concentration	108	(3)
The Role of Banking and Borrowing	111	(4)
Strategies for Controlling Seasonal or Episodic Peaks	115	(8)
Summary	123	(4)
The Initial Allocation	127	(17)
Initial Allocation Approaches	127	(4)
Comparing the Allocation Approaches	131	(8)
Cost-Effectiveness Implications of the Initial Allocation	139	(2)
Summary	141	(3)
Market Power	144	(21)
Permit Price Manipulation: Conceptual Models	144	(6)
Leveraging Power Between Output and Permit Markets	150	(2)
Ex Ante Simulations	152	(3)
Results from Experimental Studies	155	(2)
Mechanisms for Controlling Market Power	157	(1)
Programmatic Design Features that Affect Market Power	158	(3)
Summary	161	(4)
Monitoring and Enforcement	165	(23)
The Nature of the Domestic Enforcement Process	165	(3)
The Nature of the International Enforcement Process	168	(2)
The Economics of Enforcement	170	(6)
Current Enforcement Practice	176	(7)
Summary	183	(5)
Lessons	188	(19)
Lessons about Program Effectiveness	188	(4)
Lessons about Instrument Choice and Program Design	192	(11)
Lessons for Theory-Based Expectations	203	(1)
Lessons about Ex Post Evaluation	204	(1)
Concluding Comments	205	(2)
References	207	(18)
Index	225	(8)
About the Author	233