Tradable Permits with Incomplete Monitoring: Evidence from Santiago's Particulate Permits Programs

Juan-Pablo Montero

No 278, Documentos de Trabajo from Instituto de Economia. Pontificia Universidad Católica de Chile.

Abstract: I explore the advantages of tradable emission permits over uniform emission standards when the regulator has incomplete information on firms' emissions and costs of production and abatement (e.g., air pollution in large cities). Because the regulator only observes each firm's abatement technology but neither its emissions nor its output, there are cases in which standards can lead to lower emissions and, hence, welfare dominate permits. I then empirically examine these issues using evidence from a particulate permits market in Santiago, Chile.

Keywords: Asymmetric information; imperfect monitoring; pollution markets; permits (search for similar items in EconPapers)
JEL-codes: L51 Q28 (search for similar items in EconPapers)
Date: 2005
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https://www.economia.uc.cl/docs/doctra/dt-278.pdf (application/pdf)

Related works:
Working Paper: Tradable Permits with Incomplete Monitoring: Evidence from Santiago’s Particulate Permits Program (2004)
Working Paper: Tradable permits with incomplete monitoring - Evidence from Santiago's particulate permits program (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:ioe:doctra:278

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