Environmental and Production Rights Futures: A New Booming Market?

Derivatives Quarterly

Posted: 14 Oct 1997

See all articles by Joost M. E. Pennings

Joost M. E. Pennings

Maastricht University; Wageningen UR; University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics

Matthew T.G. Meulenberg

Wageningen UR

Abstract

Governments or supranational organizations have begun to introduce environmental rights (such as sulfur dioxide or chlorofluorocarbon rights) and production rights (such as milk and fishery rights) to better link production process costs and results. The authors show that the characteristics of these rights make them quite suitable for futures trading. They are an efficient tool for hedging against adverse fluctuations both in prices of rights and in the profit capacity of complicated production processes.

JEL Classification: G13, Q2, Q3, G10

Suggested Citation

Pennings, Joost M. E. and Meulenberg, Matthew T.G., Environmental and Production Rights Futures: A New Booming Market?. Derivatives Quarterly, Available at SSRN: https://ssrn.com/abstract=36305

Joost M. E. Pennings (Contact Author)

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands

HOME PAGE: http://marketing-finance.nl/cv/cvpennings.pdf

Wageningen UR ( email )

Hollandseweg 1
Wageningen, 6706KN
Netherlands

HOME PAGE: http://marketing-finance.nl/cv/cvpennings.pdf

University of Illinois at Urbana-Champaign - Department of Agricultural and Consumer Economics

1301 W. Gregory Drive
326 Mumford Hall MC-710
Urbana, IL 61801
United States
217-244-1284 (Phone)
217-333-5538 (Fax)

HOME PAGE: http://marketing-finance.nl/cv/cvpennings.pdf

Matthew T.G. Meulenberg

Wageningen UR ( email )

Hollandseweg 1
6706 KN Department of Marketing and Marketing Research
Wageningen
Netherlands
31-317-482205 (Phone)
31-317-484361 (Fax)

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