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Trading Quasi-emission Permits.Vers. 6/2003

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  • Juan-Pablo Montero

    (Instituto de Economía. Pontificia Universidad Católica de Chile.)

Abstract

I study the design of environmental policies for a regulator that has incomplete information on firms' emissions and costs of production and abatement (e.g., air pollution in cities with numerous small polluting sources). Because of incomplete information on emissions, there is no policy that can implement the first-best. Since the regulator can observe firms' abatement technologies, however, it is possible to design a quasi-emissions trading program based on this information and show that it can provide higher welfare than command-and control regulation such as technology or emission standards. I then empirically examine this claim using evidence from a particulate quasi-emissions trading program in Santiago, Chile.

Suggested Citation

  • Juan-Pablo Montero, 2002. "Trading Quasi-emission Permits.Vers. 6/2003," Documentos de Trabajo 201, Instituto de Economia. Pontificia Universidad Católica de Chile..
    • Handle: RePEc:ioe:doctra:201
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    File URL: https://www.economia.uc.cl/docs/doctra/dt-201.pdf
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    References listed on IDEAS

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    1. Richard Schmalensee & Paul L. Joskow & A. Denny Ellerman & Juan Pablo Montero & Elizabeth M. Bailey, 1998. "An Interim Evaluation of Sulfur Dioxide Emissions Trading," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 53-68, Summer.
    2. Steve Sorrell & Jim Skea (ed.), 1999. "Pollution for Sale," Books, Edward Elgar Publishing, number 1696.
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