EconPapers    
Economics at your fingertips  
 

Do Environmental Markets Improve Allocative Efficiency? Evidence from U.S. Air Pollution

Kyle Meng and Vincent Thivierge

No 34111, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The central appeal of environmental markets – efficient allocation of emission reductions – has been difficult to establish empirically. We develop a framework linking the theoretical change in allocative efficiency following a market-based policy to a quasi-experimental estimator. We apply this framework with administrative data to two major U.S. air pollution markets. We find allocative efficiency for pollution improved by 3.3 percentage points annually under California’s RECLAIM program but do not detect a change under the U.S.’ NOₓ Budget Trading Program. These results are supported by greater heterogeneity in baseline facility characteristics under RECLAIM and differences in program implementation.

JEL-codes: D61 Q50 Q52 Q53 Q58 (search for similar items in EconPapers)
Date: 2025-08
New Economics Papers: this item is included in nep-ene and nep-env
Note: EEE
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.nber.org/papers/w34111.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:34111

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w34111
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2025-09-19
Handle: RePEc:nbr:nberwo:34111