Tradable Rights to Emit Air Pollution

34 Pages Posted: 27 Feb 2009

See all articles by Dallas Burtraw

Dallas Burtraw

Resources for the Future

David A. Evans

U.S. Environmental Protection Agency (EPA) - National Center for Environmental Economics

Multiple version iconThere are 2 versions of this paper

Date Written: March 17, 2008

Abstract

The use of cap-and-trade to regulate air pollution promises to achieve environmental goals at lower cost than traditional prescriptive approaches. Cap-and-trade has been applied to various air pollutants including sulfur dioxide, nitrogen oxides, and volatile organic compounds in the United States and carbon dioxide in the European Union. This corresponds to what is likely to become the most expensive environmental undertaking in history - the effort to reduce the heating of the planet. However, the efficacy of a cap-and-trade policy for carbon dioxide depends in large part on the design of the program. In addition to the level of the cap, the most important decision facing policymakers will be the initial allocation of emissions allowances. The method used to allocate tradable emissions allowances will have significant influence on the distributional impact and efficiency of the program.

Keywords: cap-and-trade, emission allowances, allocation, auction, grandfathering, climate change, global warming, carbon dioxide

JEL Classification: Q52, Q53, Q54

Suggested Citation

Burtraw, Dallas and Evans, David A., Tradable Rights to Emit Air Pollution (March 17, 2008). RFF Discussion Paper No. 08-08, Available at SSRN: https://ssrn.com/abstract=1350023 or http://dx.doi.org/10.2139/ssrn.1350023

Dallas Burtraw (Contact Author)

Resources for the Future ( email )

1616 P Street, NW
Washington, DC 20036
United States
202-328-5087 (Phone)

David A. Evans

U.S. Environmental Protection Agency (EPA) - National Center for Environmental Economics ( email )

Washington, DC 20460
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
116
Abstract Views
963
rank
319,849
PlumX Metrics