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Biblioteca

13 de abril 2015
Market Power in Pollution Permit Markets

As with other commodity markets, markets for trading pollution permits have not been immune to market power concerns. In this paper, I survey the existing literature on market power in permit trading but also contribute with some new results and ideas. I start the survey with Hahns (1984) dominant-firm (static) model that I then extend […]

13 de abril 2015
Permisos Transables de Emisión en Chile: Lecciones, Desafíos y Oportunidades para Países en Desarrollo

Chile has pioneered the implementation of emission offseting programs pursuing simultaneously economic growth and environmental protection. In this paper, emission trading programs implemented in Santiago of Chile are analyzed and its relevance for developing countries is evaluated. It is argued that emission trading programs can be the best tool to deal with air pollution problems […]

13 de abril 2015
Market Power in an Exhaustible Resource Market: The Case of Storable Pollution Permits

Motivated by the structure of existing pollution permit markets, we study the equilibrium path that results from allocating an initial stock of storable permits to a large polluting agent and a competitive fringe. A large agent selling permits in the market exercises market power no differently than a large supplier of an exhaustible resource. However, […]

13 de abril 2015
The Effect of Transport Policies on Car Use: A Bundling Model with Applications

Borrowing from the bundling literature, the paper presents a novel model of vertical and horizontal differentiation applied to transport decisions: households differ in their preferences for transportation modes –cars vs public transport– and in the amount of travel. Using few observables, the model is then used to interpret and compute policy costs associated to the […]

10 de abril 2015
Markets for Environmental Protection: Design and Performance

Policy makers in different parts of the world are paying more attention to environmental markets (i.e., tradeable 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 […]

10 de abril 2015
Pollution Markets with Imperfectly Observed Emissions

I study the advantages of pollution permit markets over uniform emission (or technology) standards when the regulator has incomplete information on firms’ emissions and costs of production and abatement (e.g., air pollution in large cities). Because the regulator observes only each firm’s abatement technology but neither its emissions nor its output, there are cases in […]

10 de abril 2015
A Note on Market Power in an Emission Permits Market with Banking

In this paper, we investigate the effect of market power on the equilibrium path of an emission permits market in which firms can bank current permits for use in later periods. In particular, we study the market equilibrium for a large (potentially dominant) firm and a competitive fringe with rational expectations. We characterize the equilibrium […]

10 de abril 2015
On Pollution Permit Banking and Market Power

We consider a pollution permit market with a large firm and fringe of competitive firms. To smooth compliance towards a long-run emissions goal, firms are initially allocated a stock (i.e., bank) of permits that can be gradually consumed. We first show how the large firm can credibly manipulate the spot market in subgame-perfect equilibrium. Motivated […]