Auction Design and the Market for Sulfur Dioxide Emissions

47 Pages Posted: 12 Feb 1997 Last revised: 4 Oct 2010

See all articles by Paul L. Joskow

Paul L. Joskow

Alfred P. Sloan Foundation; Massachusetts Institute of Technology (MIT) - Department of Economics

Richard Schmalensee

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Elizabeth M. Bailey

University of California, Berkeley - Haas School of Business

Date Written: September 1996

Abstract

Title IV of the Clean Air Act Amendments of 1990 created a market for electric utility emissions of sulfur dioxide (SO2). Recent papers have argued that flaws in the design of the auctions that are part of this market have adversely affected its performance. These papers incorrectly assume that trade can only occur at auctions, however. Our empirical analysis of the SO2 emissions market shows that the auctions have become a small part of a relatively efficient market and that the auction design problems that have attracted the most attention have had no effect on actual market prices

Suggested Citation

Joskow, Paul L. and Schmalensee, Richard and Bailey, Elizabeth M., Auction Design and the Market for Sulfur Dioxide Emissions (September 1996). NBER Working Paper No. w5745. Available at SSRN: https://ssrn.com/abstract=3726

Paul L. Joskow (Contact Author)

Alfred P. Sloan Foundation ( email )

630 Fifth Avenue
Suite 2550
New York, NY 10111
United States
212-649-1649 (Phone)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

50 Memorial Drive
E52-373A
Cambridge, MA 02142
United States
617-253-6664 (Phone)
617-258-7070 (Fax)

Richard Schmalensee

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

Room E62-525
Cambridge, MA 02142
United States
617-253-2957 (Phone)
617-258-6617 (Fax)

Elizabeth M. Bailey

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
60
rank
350,069
Abstract Views
1,902
PlumX Metrics