Enforcement and price controls in emissions trading
This paper examines how enforcement affects the structure and performance of emissions trading programs with price controls under uncertainty about firms' abatement costs. The analysis highlights how an enforcement strategy can cause abatement-cost risk to be transmitted to enforcement costs vi...
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| Veröffentlicht in: | Journal of environmental economics and management 2014-01, Vol.67 (1), p.20-38 |
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| container_end_page | 38 |
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| container_title | Journal of environmental economics and management |
| container_volume | 67 |
| creator | Stranlund, John K. Moffitt, L. Joe |
| description | This paper examines how enforcement affects the structure and performance of emissions trading programs with price controls under uncertainty about firms' abatement costs. The analysis highlights how an enforcement strategy can cause abatement-cost risk to be transmitted to enforcement costs via the price of permits. When this occurs, accommodating the effect of abatement-cost risk with an optimal policy results in higher expected emissions and lower expected permit price than their second-best optimal values. However, it is possible to design an enforcement strategy that shields enforcement costs from abatement-cost risk by tying sanctions directly to permit prices. This enforcement strategy stabilizes enforcement effort, the optimal permit supply and price controls are independent of enforcement costs, and the policy produces the second-best optimal outcome. |
| doi_str_mv | 10.1016/j.jeem.2013.10.001 |
| format | Article |
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This enforcement strategy stabilizes enforcement effort, the optimal permit supply and price controls are independent of enforcement costs, and the policy produces the second-best optimal outcome.</description><subject>Cap-and-trade</subject><subject>Costs</subject><subject>Emissions taxes</subject><subject>Emissions trading</subject><subject>Enforcement</subject><subject>Environmental policy</subject><subject>Hybrid policies</subject><subject>Monitoring</subject><subject>Penalties</subject><subject>Permits</subject><subject>Price controls</subject><subject>Price regulations</subject><subject>Prices vs. quantities</subject><subject>Studies</subject><subject>Uncertainty</subject><subject>Wage & price controls</subject><issn>0095-0696</issn><issn>1096-0449</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2014</creationdate><recordtype>article</recordtype><recordid>eNp9kE9LxDAUxIMouK5-AU8FL166vqRp2oAXWdY_sOBFzyGbvEhKm6xJV_Db27KePHh6MMw8Zn6EXFNYUaDirlt1iMOKAa0mYQVAT8iCghQlcC5PyQJA1iUIKc7JRc4dALTQiAWpNsHFZHDAMBY62GKfvMHCxDCm2OfChwIHn7OPIRdj0taHj0ty5nSf8er3Lsn74-Zt_VxuX59e1g_b0nBWj6VoGEMmdgacEDVKwbiz1lEHglduZyWyVlrdMqul2dVcW4NCt7J23FHUTbUkt8e_-xQ_D5hHNTUx2Pc6YDxkRRtBeVtJyibrzR9rFw8pTO0U5Q1nvKrY7GJHl0kx54ROTWsHnb4VBTVzVJ2aOaqZ46xNHKfQ_TGE09Qvj0ll4zEYtD6hGZWN_r_4DylyexI</recordid><startdate>201401</startdate><enddate>201401</enddate><creator>Stranlund, John K.</creator><creator>Moffitt, L. 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| identifier | ISSN: 0095-0696 |
| ispartof | Journal of environmental economics and management, 2014-01, Vol.67 (1), p.20-38 |
| issn | 0095-0696 1096-0449 |
| language | eng |
| recordid | cdi_proquest_miscellaneous_1761483912 |
| source | Elsevier ScienceDirect Journals Complete |
| subjects | Cap-and-trade Costs Emissions taxes Emissions trading Enforcement Environmental policy Hybrid policies Monitoring Penalties Permits Price controls Price regulations Prices vs. quantities Studies Uncertainty Wage & price controls |
| title | Enforcement and price controls in emissions trading |
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