Optimal trading ratios for pollution permit markets

• 成果类型: Article
• 署名作者: Holland, Stephen P.; Yates, Andrew J.
• 署名单位: University of North Carolina; University of North Carolina Greensboro; National Bureau of Economic Research; University of North Carolina; University of North Carolina Chapel Hill; University of North Carolina; University of North Carolina Chapel Hill
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2015.03.005
• 发表日期: 2015
• 页码: 16-27
• 关键词: Pollution markets; asymmetric information; Trading ratios

摘要

We demonstrate a novel method for improving the efficiency of pollution permit markets by optimizing the exchange of emissions through trade. Under full-information, it is optimal for emissions to exchange according to the ratio of marginal damages. Under asymmetric information, we derive necessary conditions for the marginal damage trading ratios to be optimal, illustrate that the marginal damage trading ratios are generally not optimal, and show how to improve efficiency using optimal trading ratios. We calculate the optimal trading ratios for a global carbon market. The gains from using optimal trading ratios rather than marginal damage trading ratios range from substantial to trivial, which suggests the need for careful consideration of asymmetric information when designing permit markets. (C) 2015 Elsevier B.V. All rights reserved.