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Markets for Environmental Protection; Desing and Performance

Author

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  • Juan-Pablo Montero

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

Abstract

Policy makers in different parts of the world are paying more attention to environmental markets (i.e., tradeable emission permits markets) as an alternative to the traditional command-and-command control approach of setting uniform emission and technology standards. I extend the basic (perfect information) model of a permits market to accommodate for practical considerations including regulator's asymmetric information on firms' costs, uncertainty on benefits from pollution control, incomplete enforcement, incomplete monitoring of emissions and the possibility of voluntary participation of non-affected sources. Implications for instrument design and implementation are provided.

Suggested Citation

  • Juan-Pablo Montero, 2004. "Markets for Environmental Protection; Desing and Performance," Documentos de Trabajo 269, Instituto de Economia. Pontificia Universidad Católica de Chile..
    • Handle: RePEc:ioe:doctra:269
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    File URL: https://www.economia.uc.cl/docs/doctra/dt-269.pdf
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    References listed on IDEAS

    as
    1. Jung, Chulho & Krutilla, Kerry & Boyd, Roy, 1996. "Incentives for Advanced Pollution Abatement Technology at the Industry Level: An Evaluation of Policy Alternatives," Journal of Environmental Economics and Management, Elsevier, vol. 30(1), pages 95-111, January.
    2. O'Ryan, Raul E., 1996. "Cost-Effective Policies to Improve Urban Air Quality in Santiago, Chile," Journal of Environmental Economics and Management, Elsevier, vol. 31(3), pages 302-313, November.
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    More about this item

    Keywords

    Environmental regulation; permits markets; asymmetric information; incomplete enforcement;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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