When Should Uncertain Nonpoint Emissions be Penalized in a Trading Program?

David Hennessy and Hongli Feng

No 9805, 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: When nonpoint source pollution is stochastic and the damage function is convex, intuition might suggest it is more important to control a nonpoint pollution source than a point source. Earlier research has provided sufficient conditions such that the permit price for a unit of ex-ante expected emissions should be higher than the permit price for a unit of certain emissions. Herein we provide a set of necessary and sufficient conditions such that this is the case. An approach to testing for the validity of the condition set is available, and has been applied to a related problem.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 16
Date: 2007
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Journal Article: When Should Uncertain Nonpoint Emissions Be Penalized in a Trading Program? (2008)
Working Paper: When Should Uncertain Nonpoint Emissions Be Penalized in a Trading Program? (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea07:9805

DOI: 10.22004/ag.econ.9805

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