Matti Liski

Paul Joskow4
Dick Schmalensee3
4Paul Joskow
3Dick Schmalensee
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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 (SO 2) emission allowances that was created by the U.S. Acid Rain Program. We develop a model of efficient banking, select appropriate parameter values,(More)
This paper provides an empirical evaluation of the temporal efficiency of the U.S. Acid Rain Program, which implemented a nationwide market for trading and banking sulfur dioxide (SO 2) emission allowances. We first develop a model of efficient banking and select appropriate parameter values. Then, we use aggregate data from the first seven years of the(More)
I study the advantages of pollution permit markets over traditional standard regulations 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(More)
We consider per-capita carbon dioxide emission trends in 16 early developed countries over the period 1870-2028. Using a multiple-break time series method we find more evidence for very early downturns in per-capita trends than for late downturns, during the oil price shocks of the 1970s. Only for two countries do downturns in trends imply downward sloping(More)
Energy costs are notoriously uncertain but what is the effect of this on energy-saving investments? We find that real-option frictions imply a novel equilibrium response to increasing but uncertain energy costs: early investments are cautious but ultimately real-option frictions endogenously vanish, and the activity affected by higher energy costs fully(More)
We consider an infinitely-repeated oligopoly in which at each period firms not only serve the spot market by either competing in prices or quantities but also have the opportunity to trade forward contracts. Contrary to the pro-competitive results of finite-horizon models, we find that the possibility of forward trading allows firms to sustain collusive(More)
A tradeable permits market is said to be e¢cient when all a¤ected …rms trade permits until their marginal costs equal the market price. Detailed …rm-level data are generally required to perform such an e¢ciency test, yet such information is rarely available. If …rms face a declining target, however, and are allowed to bank permits, as has occured recently,(More)
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