New and old market-based instruments for climate change policy

Environmental Economics and Policy Studies

Volumn 12, Issue 1, 2010, Pages 1-30

  Goers, Sebastian R ^a   Wagner, Alexander F ^a,b   Wegmayr, Jürgen ^c  

^a JOHANNES KEPLER UNIVERSITY LINZ   (Austria)

^b UNIVERSITY OF ZURICH   (Switzerland)

^c Energie AG Oberösterreich Trading GmbH   (Austria)

Author keywords

Climate change; Emission taxes; Market based policies; Prediction markets; Tradable permits

Indexed keywords

EID: 77953903989     PISSN: 1432847X     EISSN: None     Source Type: Journal    
DOI: 10.1007/s10018-010-0161-x     Document Type: Article

References (101)

1. Ackermann BA, Stewart RB (1985) Reforming environmental law. Stanford Law Review 37: 1333-1346.
2. Adar Z, Griffin JM (1976) Uncertainty and the choice of pollution control instruments. Journal of Environmental Economics and Management 3: 178-188.
3. Aldy J, Stavins RN (2008) Designing the post-Kyoto climate regime: lessons from the Harvard Project on International Climate Agreements. Report for Harvard Project on International Climate Agreements, Belfer Center for Science and International Affairs, Harvard Kennedy School, Cambridge, MA.
4. Barro RJ, Sala-i-Martin X (2003) Economic growth, 2nd edn. MIT Press, Cambridge, MA.
5. Baumol W, Oates WE (1988) The theory of environmental policy. Cambridge University Press, Cambridge, UK.
6. Bennear LS, Stavins RN (2007) Second-best theory and the use of multiple policy instruments. Environmental and Resource Economics 37: 111-129.
7. Berg J, Nelson F, Rietz T (2001) Accuracy and forecast standard error prediction markets. University of Iowa, Iowa City.
8. Bessembinder H, Seguin PJ (1992) Futures trading activity and stock price volatility. Journal of Finance 47: 2015-2034.
9. Biglaiser G, Horowitz JK, Quiggin J (1996) Dynamic pollution regulation. Journal of Regulatory Economics 8: 33-44.
10. Boemare G, Quirion P (2002) Implementing greenhouse gas trading in Europe: lessons from economic literature and international experiences. Ecological Economics 43: 213-230.
11. Brown-Hruska S, Kuserk G (1995) Volatility, volume, and the notion of balance in the SP 500 cash and futures markets. Journal of Futures Markets 15: 677-689.
12. Bruvoll A, Larsen BM (2004) Greenhouse gas emissions in Norway: do carbon taxes work? Energy Policy 32: 493-505.
13. Buscaglia E, van Dijk J (2003) Controlling organized crime and corruption in the public sector. Forum on Crime and Society 3: 3-34.
14. Cason TN, Gangadharan L (2003) Transaction costs in tradable permit markets: an experimental study of pollution market designs. Journal of Regulatory Economics 23: 145-165.
15. Chen K-Y, Plott CR (1988) Prediction markets and information aggregation mechanism: experiments and application. California Institute of Technology, Pasadena.
16. 2 option pricing. Swiss Finance Institute, Zurich.
17. Chichilnisky G, Heal G (1994) Who should abate carbon emissions? An international viewpoint. Economics Letters 44: 443-449.
18. Cline WR (2004) Meeting the challenge of global warming. Institute for International Economics, Washington DC.
19. Convery FG (2009) Reflections-the emerging literature on emissions trading in Europe. Review of Environmental Economics and Policy 3: 121-137.
20. Cramton P, Kerr S (2002) Tradeable carbon permit auctions: how and why to auction not grandfather. Energy Policy 30: 333-345.
21. Dales JH (1968) Pollution, property and prices. University of Toronto Press, Toronto.
22. Darrat AF, Rahman S (1995) Has futures trading activity caused stock price volatility? Journal of Futures Markets 15: 537-557.
23. Darrat AF, Rahman S, Zhong M (2002) On the role of futures trading in spot market fluctuations: perpetrator of volatility or victim of regret? Journal of Financial Research 25: 431-444.
24. Daskalakis G, Markellos RN (2008) Are the European carbon markets efficient? Review of Futures Markets 17: 103-128.
25. Dewees DN (1983) Instrument choice in environmental policy. Economic Inquiry 21: 53-68.
26. Edwards FR (1988a) Does future trading increase stock market volatility. Financial Analyst Journal 44: 63-69.
27. Edwards FR (1988b) Futures trading and cash market volatility: stock index and interest rate futures. Journal of Futures Markets 8: 421-439.
28. Ellerman AD, Joskow P (2008) The European Union's emission trading system in perspective. Prepared for Pew Center on Global Climate Change, Arlington, VA.
29. 2 emissions trading. Center for Energy and Environmental Policy Research (CEEPR) and Catholic University of Chile, Cambridge, MA.
30. Figlewski S (1979) Subjective information and market efficiency in a betting market. Journal of Political Economy 87: 75-88.
31. Figlewski S (1981) Futures trading and volatility in the GNMA market. Journal of Finance 39: 445-456.
32. Goulder LH (1995) Environmental taxation and the double dividend: a reader's guide. International Tax and Public Finance 2: 157-183.
33. Goulder LH, Bovenberg L (1996) Revenue-raising vs. other approaches to environmental protection: the critical significance of pre-existing tax distortions. NBER Working Paper 5641, National Bureau of Economic Research, Cambridge, MA.
34. Gürkayanak R, Wolfers J (2005) Macroeconomic derivatives: an initial analysis of market-based macro forecasts. In: Pissarides C, Frankel J (eds) NBER International Seminar on Macroeconomics, National Bureau of Economic Research, Cambridge, MA.
35. Hahn RW, Stavins RN (2010) The effect of allowance allocations on cap-and-trade system performance. Discussion Paper 10-21, Resources for the Future, Washington DC.
36. Halla M, Schneider F, Wagner AF (2008) Satisfaction with democracy and collective action problems: the case of the environment. University of Linz and University of Zurich.
37. Hanson R (2003) Combinatorial information design. Information Systems Frontiers 5: 105-119.
38. Hanson R (2006) Designing real terrorism futures. Public Choice 128: 257-274.
39. Harris LE (1989) SP 500 Cash stock price volatilities. Journal of Finance 44: 1155-1175.
40. Hutschenreiter G, Aiginger K (2001) Steuerliche Anreize für Forschung und Entwicklung-Internationaler Vergleich und Reformvorschläge für Oesterreich. Austrian Institute of Economic Research (WIFO), Vienna.
41. IPA Energy Consulting (2005) Implications of the EU Emissions Trading Scheme for the UK power generation sector. Prepared for Department of Trade and Industry, London.
42. Intergovernmental Panel on Climate Change (IPCC) (2001) Climate change 2001: impact, adaptation, and vulnerability. Cambridge University Press, New York.
43. IPCC (2007) Climate change 2007: impact, adaptation, and vulnerability. Cambridge University Press, New York.
44. Jacoby HD, Ellerman AD (2004) The safety valve and climate policy. Energy Policy 32: 481-491.
45. Jaffe AB, Stavins RN (1995) Dynamic incentives of environmental regulations. Journal of Environmental Economics and Management 29: S43-63.
46. Jaffe J, Stavins RN (2007) Linking tradable permit systems for greenhouse gas emissions: opportunities, implications, and challenges. Prepared for International Emissions Trading Association, Geneva.
47. Jaffe J, Ranson M, Stavins RN (2009) Linking tradable permit systems: a key element of emerging international climate policy architecture. Ecology Law Quarterly 36: 789-808.
48. Joskow P, Schmalensee R (1998) The political economy of market-based environmental policy. Journal of Law and Economics 41: 37-85.
49. Kemfert C, Praetorius B (2005) The economic costs of climate change and climate change policy (in German). Vierteljahreshefte zur Wirtschaftsforschung. Quarterly Journal of Economic Research 74: 133-136.
50. Kohlhaas M (2005) Gesamtwirtschaftliche Effekte der ökologischen Steuerreform (Economic effects of the ecological tax reform). In Diw (ed): Band II für das Vorhaben Quantifizierung der Effekte der ökologischen Steuerreform auf Umwelt, Beshchäftigung und Innovation, Berlin.
51. Kromp-Kolb H (2003) Starting project climate protection - first analysis of extreme weather and its effects in Austria - final report (in German). University of Natural Resources and Applied Sciences Viena.
52. Krupnick AJ, Oates WE, van de Verg E (1983) On marketable air pollution permits: the case for a system of pollution offsets. Journal of Environmental Economics and Management 10: 233-247.
53. Lai Y-B (2008) Auctions or grandfathering: the political economy of tradable emission permits. Public Choice 136: 181-200.
54. LaPorta R, Lopez-de-Silanes F, Shleifer A, Vishny R (1999) The quality of government. Journal of Law, Economics and Organization 15: 222-279.
55. Lecocq F, Chomitz KM (2001) Optimal use of carbon sequestration in a global climate change strategy: is there a wooden bridge to a clean energy future? Working Paper 2635, World Bank Development Research Group, Washington DC.
56. Lee SB, Ohk KY (1992) Stock index futures listing and structural change in time-varying volatility. Journal of Futures Markets 12: 493-509.
57. Lubowski RN, Plantinga AJ, Stavins RN (2006) Land-use change and carbon sinks: econometric estimation of the carbon sequestration supply function. Journal of Environmental Economics and Management 51: 135-152.
58. Maeda A (2004) Impact of banking and forward contracts on tradable permit markets. Environmental Economics and Policy Studies 6: 81-102.
59. McGartland AM, Oates WE (1985) Marketable permits for the prevention of environmental deterioration. Journal of Environmental Economics and Management 12: 207-228.
60. McKibbin WJ, Wilcoxen PJ (2002) The role of economics in climate change policy. Journal of Economic Perspectives 16: 107-129.
61. Milliman SR, Prince R (1989) Firm incentives to promote technological change in pollution control. Journal of Environmental Economics and Management 17: 245-265.
62. Montero J-P (2002) Prices versus quantities with incomplete enforcement. Journal of Public Economics 85: 435-454.
63. Montgomery WD (1972) Markets in licenses and efficient pollution control programs. Journal of Economic Theory 3: 395-418.
64. Mukherjee V, Rübbelke DTG (2006) Global climate change, technology transfer and trade with complete specialization. Nota di Lavoro Working Paper 2006. 114, Fondazione Eni Enrico Mattei, Milan.
65. Murray BC, Newell RG, Pizer WA (2009) Balancing cost and emissions certainty: an allowance reserve for cap-and-trade. Review of Environmental Economics and Policy 3: 84-103.
66. Nelson F, Neumann G, Polgreen P (2006) Operating with doctors: results from the 2004 and 2005 influenza markets. University of Iowa, Iowa City.
67. Newell RG, Pizer WA (2003) Regulating stock externalities under uncertainty. Journal of Environmental Economics and Management 45: 416-432.
68. Newell R, Pizer W, Zhang J (2003) Managing permit markets to stabilize prices. Discussion Paper 03-34, Resources for the Future, Washington DC.
69. Nordhaus W (1994) Managing the global commons. MIT Press, Cambridge, MA.
70. Nordhaus W (2006) The Stern Review on the economics of climate change. Yale University, New Haven.
71. Olmstead SM, Stavins RN (2008) A meaningful second commitment period for the Kyoto Protocol. In: Stiglitz JE, Edlin AS, DeLong JB (eds) The economists' voice: top economists take on today's problems. Columbia University Press, New York.
72. Olsson LE, Akiyama M, Gärling T, Gustafsson M, Loukopoulos P (2006) Examining the use of subsidies for the abatement of greenhouse gas emissions through experimental simulations. European Environment 16: 184-197.
73. 2. Journal of Applied Corporate Finance 21: 79-86.
74. Pennock DM, Giles CL, Nielsen FA (2001) The real power of artificial markets. Science 291: 987-988.
75. Pizer WA (2002) Combining price and quantity controls to mitigate global climate change. Journal of Public Economics 85: 409-434.
76. Roberts MJ, Spence AM (1976) Effluent charges and licenses under uncertainty. Journal of Public Economics 5: 193-208.
77. Roll R (1984) Orange juice and weather. American Economic Review 74: 861-880.
78. Romer PM (1990) Endogenous technological change. Journal of Political Economy 98: 71-102.
79. Santoni GJ (1987) Has programmed trading made stock prices more volatile? Federal Reserve Bank of St. Louis Review 69: 8-29.
80. Servan-Schreiber E, Wolfers J, Pennock D, Galebach B (2004) Prediction markets: does money matter? Electronic Markets 14: 243-251.
81. 2 cost pass through and windfall profits in the power sector. Climate Policy 6: 49-72.
82. Snyder LD, NH Miller, RN Stavins (2003) The effects of environmental regulation on technology diffusion: the case of chlorine manufacturing. American Economic Review 93: 431-435.
83. Solow RM (1956) A contribution to the theory of economic growth. Quarterly Journal of Economics 70: 65-94.
84. Stavins RN (1999) The costs of carbon sequestration: a revealed preference approach. American Economic Review 89: 994-1009.
85. Stavins RN (2003) Experience with market-based environmental policy instruments. In: Mäler K-G, Vincent J (eds) The handbook of environmental economics. North-Holland, Amsterdam.
86. Stavins RN (2007) Market-based environmental policies: what can we learn from U. S. experience and related research. In: Freeman J, Kolstad C (eds) Moving to markets in environmental regulation: lessons from twenty years of experience. Oxford University Press, New York.
87. Stavins RN (2008) Addressing climate change with a comprehensive US cap-and-trade system. Oxford Review of Economic Policy 24: 298-321.
88. Stavins RN, Richards KR (2005) The cost of U. S. forest-based sequestration. Prepared for Pew Center on Global Climate Change, Arlington, VA.
89. Stein JC (1987) Informational externalities and welfare-reducing speculation. Journal of Political Economy 95: 1123-1145.
90. Stern N (2006) The economics of climate change. HM Treasury, London.
91. Svendsen GT (1999) US interest groups prefer emission trading: a new perspective. Public Choice 101: 101-128.
92. Swiss Re (2006) Results of the global warming: More wind damages in Europe (in German).
93. Tol RSJ (2006) The Stern Review of the economics of climate change: a comment. Energy and Environment 17: 977-981.
94. 2 emission allowances: an empirical analysis of the trial period. Journal of Derivatives 17: 73-88.
95. van Steenberghe V (2005) Carbon dioxide abatement costs and permit price: exploring the impact of banking and the role of future commitments. Environmental Economics and Policy Studies 7: 75-108.
96. Verband der industriellen Energie-u. Kraftwirtschaft (2006) Press release: 10 billion euro unjustified extra profits for the electricity sector (in German).
97. Weitzman M (1974) Prices versus quantities. Review of Economic Studies 41: 477-491.
98. Weitzman ML (2009) On modeling and interpreting the economics of catastrophic climate change. Review of Economics and Statistics 91: 1-19.
99. Woerdman E (2001) Developing a European carbon trading market: will permit allocation distort competition and lead to state aid? University of Groningen, Groningen.
100. Wolfers J, Zitzewitz E (2005) Interpreting prediction market prices as probabilities. NBER Working Paper 10359, National Bureau of Economic Research, Cambridge, MA.
101. Wolfers J, Zitzewitz E (2008) Prediction markets in theory and practice. New Palgrave Dictionary of Economics and the Law. Palgrave, London.