The efficiency and robustness of allowance banking in the U.S. Acid Rain Program
This paper provides an empirical evaluation of the efficiency of allowance banking (i.e., abating more in early periods in order to abate less in later periods) in the nationwide market for sulfur dioxide (SO2) emission allowances that was created by the U.S. Acid Rain Program. We develop a model of...
| Main Authors: | , |
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| Other Authors: | |
| Format: | Working Paper |
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MIT Center for Energy and Environmental Policy Research
2009
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| Online Access: | http://hdl.handle.net/1721.1/45035 |
| _version_ | 1811093910935568384 |
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| author | Ellerman, A. Denny Montero, Juan-Pablo |
| author2 | Massachusetts Institute of Technology. Center for Energy and Environmental Policy Research. |
| author_facet | Massachusetts Institute of Technology. Center for Energy and Environmental Policy Research. Ellerman, A. Denny Montero, Juan-Pablo |
| author_sort | Ellerman, A. Denny |
| collection | MIT |
| description | This paper provides an empirical evaluation of the efficiency of allowance banking (i.e., abating more in early periods in order to abate less in later periods) in the nationwide market for sulfur dioxide (SO2) emission allowances that was created by the U.S. Acid Rain Program. We develop a model of efficient banking, select appropriate parameter values, and evaluate the efficiency of observed temporal pattern of abatement based on aggregate data from the first eight years of the Acid Rain Program. Contrary to the general opinion that banking in this program has been excessive, we find that it has been reasonably efficient. We also show that this optimal banking program is robust to the errors in expectation that characterized the early years of this program; however, this property is due to design features that are unique to the U.S. Acid Rain Program. |
| first_indexed | 2024-09-23T15:52:39Z |
| format | Working Paper |
| id | mit-1721.1/45035 |
| institution | Massachusetts Institute of Technology |
| last_indexed | 2024-09-23T15:52:39Z |
| publishDate | 2009 |
| publisher | MIT Center for Energy and Environmental Policy Research |
| record_format | dspace |
| spelling | mit-1721.1/450352019-04-12T09:55:47Z The efficiency and robustness of allowance banking in the U.S. Acid Rain Program Ellerman, A. Denny Montero, Juan-Pablo Massachusetts Institute of Technology. Center for Energy and Environmental Policy Research. This paper provides an empirical evaluation of the efficiency of allowance banking (i.e., abating more in early periods in order to abate less in later periods) in the nationwide market for sulfur dioxide (SO2) emission allowances that was created by the U.S. Acid Rain Program. We develop a model of efficient banking, select appropriate parameter values, and evaluate the efficiency of observed temporal pattern of abatement based on aggregate data from the first eight years of the Acid Rain Program. Contrary to the general opinion that banking in this program has been excessive, we find that it has been reasonably efficient. We also show that this optimal banking program is robust to the errors in expectation that characterized the early years of this program; however, this property is due to design features that are unique to the U.S. Acid Rain Program. Supported by the MIT Center for Energy and Environmental Policy Research. 2009-04-03T17:06:40Z 2009-04-03T17:06:40Z 2005 Working Paper 2005-005 http://hdl.handle.net/1721.1/45035 61196850 MIT-CEEPR (Series) ; 05-005WP. 39 p application/pdf MIT Center for Energy and Environmental Policy Research |
| spellingShingle | Ellerman, A. Denny Montero, Juan-Pablo The efficiency and robustness of allowance banking in the U.S. Acid Rain Program |
| title | The efficiency and robustness of allowance banking in the U.S. Acid Rain Program |
| title_full | The efficiency and robustness of allowance banking in the U.S. Acid Rain Program |
| title_fullStr | The efficiency and robustness of allowance banking in the U.S. Acid Rain Program |
| title_full_unstemmed | The efficiency and robustness of allowance banking in the U.S. Acid Rain Program |
| title_short | The efficiency and robustness of allowance banking in the U.S. Acid Rain Program |
| title_sort | efficiency and robustness of allowance banking in the u s acid rain program |
| url | http://hdl.handle.net/1721.1/45035 |
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