Investment decisions and transferable discharge permits: An empirical study of water quality management under policy uncertainty

David Letson

Environmental & Resource Economics, 1992, vol. 2, issue 5, 458 pages

Abstract: The problem of investiment decisions for sources participating in transferable discharge permit (TDP) markets has not received much attention. One way TDPs offer potential savings is with their ability to influence development in a region. Static models have assessed the potential savings of TDPs but do not explicitly consider investment decisions; thus they do not capture this long run role nor that of policy uncertainty and tend to understate both the cost saving potential and the difficulty in achieving it. This paper addresses both problems by emphasizing the temporal dimension of TDPs. A two-period investment model investigates the magnitude of these potential savings and the effects of two types of policy uncertainty upon expected gains from permit trading. Copyright Kluwer Academic Publishers 1992

Keywords: Environmental regulation; regional planning; water quality (search for similar items in EconPapers)
Date: 1992
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/BF00376828

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