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FäreRolfEconomicsTradablePermitsUnrealized_AppendixB.pdf Public Deposited

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https://ir.library.oregonstate.edu/concern/articles/w6634530s

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  • With the advent of tradable permit programs for bad outputs (e.g., SO₂ emissions); concerns arose over whether the theoretical gains from trade would be realized. We will employ a methodology that calculates the potential gains accruing to coal-fired electric power plants from implementing a tradable permit program. The magnitude of the potential gains in a plant's kilowatt hour output from a tradable permit program relative to its observed production provides insights into the existence of intertemporal allocative inefficiencies and spatial allocative inefficiencies after the implementation of a tradable permit program.
  • Keywords: Joint production model, Tradable permits, SO₂ emissions
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