Bankable permits for the control of environmental pollution

• 成果类型: Article
• 署名作者: Kling, C; Rubin, J
• 署名单位: Iowa State University; University of Tennessee System; University of Tennessee Knoxville
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/S0047-2727(96)01600-3
• 发表日期: 1997
• 页码: 101-115
• 关键词: emissions; marketable permits; pollution control

摘要

Intertemporal trading of emission permits (banking) is often identified as one of three promising market mechanisms for controlling pollution (along with averaging and trading). Surprisingly, the efficiency properties of permit banking systems have not been investigated. Using a simple optimal control model, this paper investigates firms' incentives for banking or borrowing emission permits and compares the emission and output streams firms would choose with the socially optimal solution. We find that in many cases firms will suboptimally choose excessive damage and output levels in early periods and correspondingly too few in later periods if given the opportunity to freely move emissions between time periods. We propose a simple alternative trading scheme we term modified banking that counters this problem and should be no more difficult for an environmental authority to implement than a straight banking system.