{"id":3341,"date":"2013-03-21T08:37:32","date_gmt":"2013-03-21T08:37:32","guid":{"rendered":"https:\/\/www.lse.ac.uk\/granthaminstitute\/?post_type=publication&p=3341"},"modified":"2024-08-19T14:31:59","modified_gmt":"2024-08-19T13:31:59","slug":"experimental-comparison-between-markets-on-dynamic-permit-trading-and-investment-in-irreversible-abatement-with-and-without-non-regulated-companies","status":"publish","type":"publication","link":"https:\/\/www.lse.ac.uk\/granthaminstitute\/publication\/experimental-comparison-between-markets-on-dynamic-permit-trading-and-investment-in-irreversible-abatement-with-and-without-non-regulated-companies\/","title":{"rendered":"Experimental comparison between markets on dynamic permit trading and investment in irreversible abatement with and without non-regulated companies"},"content":{"rendered":"\n

Abstract<\/h2>\n

This paper examines the investment strategies of compliance companies in irreversible abatement technologies and the environmental achievements of the system in an inter-temporal cap-and-trade market using laboratory experiments. The experimental analysis is performed under varying market structures: firstly, in a market that is exclusive to compliance companies and subsequently, in a market that is open to both compliance and non-compliance entities. In line with theoretical models on irreversible abatement investment, the paper shows that regulated companies trade permits at a premium. Also, steep per unit penalties for excess emissions prompt early investments in irreversible abatement technologies. Further, the paper shows that by contributing to the permit demand and supply, non-compliance companies:<\/p>\n

    \n
  1. enhance the exchange of permits, helping the system to achieve a zero-excess permit position,<\/li>\n
  2. increase the price levels, but has no apparent effect on price variability.<\/li>\n<\/ol>\n

    Reference<\/h3>\n

    Taschini, Luca, Chesney, Marc and Wang, Mei (2014) Experimental comparison between markets on dynamic permit trading and investment in irreversible abatement with and without non-regulated companies.<\/em> Journal of Regulatory Economics, Online . pp. 1-28. ISSN 0922-680X (In Press)<\/p>\n\n","protected":false},"excerpt":{"rendered":"\n

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