Expecting the Unexpected: Emissions Uncertainty and Environmental Market Design

• 成果类型: Article
• 署名作者: Borenstein, Severin; Bushnell, James; Wolak, Frank A.; Zaragoza-Watkins, Matthew
• 署名单位: University of California System; University of California Berkeley; National Bureau of Economic Research; University of California System; University of California Davis; Stanford University; Vanderbilt University
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20161218
• 发表日期: 2019
• 页码: 3953-3977
• 关键词: allocation; cap

摘要

We study potential equilibria in California's cap-and-trade market for greenhouse gases (GHGs) based on information available before the market started. We find large ex ante uncertainty in business-as-usual emissions and in the abatement that might result from non-market policies, much larger than the reduction that could plausibly occur in response to an allowance price within a politically acceptable range. This implies that the market price is very likely to be determined by an administrative price floor or ceiling. Similar factors seem likely to be present in other cap-and-trade markets for GHGs.