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Permit trading with flow pollution and stock pollution

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  • Wang, Zhiyu

Abstract

Water pollutants are non-uniformly mixed across space and different in the persistence of environmental damage. Their marginal environmental damage could vary to a large degree with emission locations. The efficient pollution control should integrate heterogeneity in the marginal environmental damage caused by pollutants. However, little literature on permit trading has considered the scale and the persistence of environmental damage in the meantime. This paper designs proper trading ratios in permit trading to alleviate environmental damage from both aspects. It finds that it is not only important but also indispensable to incorporate the decay rate of pollutant, the discount rate, and the initial pollutant stock into permit trading, so as to achieve the efficient pollution control.

Suggested Citation

  • Wang, Zhiyu, 2018. "Permit trading with flow pollution and stock pollution," Journal of Environmental Economics and Management, Elsevier, vol. 91(C), pages 118-132.
    • Handle: RePEc:eee:jeeman:v:91:y:2018:i:c:p:118-132
    DOI: 10.1016/j.jeem.2018.07.002
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    2. Maogang Tang & Ruihan Zhang & Zhen Li & Baijun Wu, 2021. "Assessing the impact of tradable discharge permit on pollution reduction and innovation: micro-evidence from Chinese industrial enterprises," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(11), pages 16911-16933, November.

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    More about this item

    Keywords

    Flow pollution; Lake; Non-uniform mixing; Permit trading; River; Stock pollution;
    All these keywords.

    JEL classification:

    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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