An Interim Evaluation of Sulfur Dioxide Emissions Trading

Richard Schmalensee, Paul Joskow, A. Denny Ellerman, Juan-Pablo Montero and Elizabeth M. Bailey

Journal of Economic Perspectives, 1998, vol. 12, issue 3, 53-68

Abstract: This paper summarizes recent empirical research on compliance costs and strategies and on permit market performance under the U.S. acid rain program, the first large-scale, long-term program to use tradeable emissions permits to control pollution. An efficient market for emissions permits developed in a few years, and this program more than achieved its early goals on time, and it cost less than had been projected. Because of expectation errors, however, investment was excessive, and permit prices substantially understate abatement costs. The tradeable permits approach has worked well, but it is not a miracle cure for environmental problems. Coauthors are Paul L. Joskow, A. Denny Ellerman, Juan Pablo Montero, and Elizabeth M. Bailey.

JEL-codes: H23 Q25 Q28 (search for similar items in EconPapers)
Date: 1998
Note: DOI: 10.1257/jep.12.3.53
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Citations: View citations in EconPapers (188)

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