An optimal hybrid emission control system in a multiple compliance period model
- Authors
- Yu, Jongmin; Mallory, Mindy L.
- Issue Date
- Feb-2015
- Publisher
- ELSEVIER SCIENCE BV
- Keywords
- Cap and trade; Climate change; Emissions tax; Hybrid emission control; Safety valve
- Citation
- RESOURCE AND ENERGY ECONOMICS, v.39, pp.16 - 28
- Journal Title
- RESOURCE AND ENERGY ECONOMICS
- Volume
- 39
- Start Page
- 16
- End Page
- 28
- URI
- https://scholarworks.bwise.kr/hongik/handle/2020.sw.hongik/13672
- DOI
- 10.1016/j.reseneeco.2014.11.003
- ISSN
- 0928-7655
- Abstract
- We characterize an optimal hybrid policy for pollutant emissions that includes a permit price ceiling and emission cap in a multi-period model. Previous studies have primarily focused on a hybrid policy of emission regulation that included an emission cap and permit price ceiling in a single period model, we extend this literature by developing such an optimal hybrid model in a multi-period framework where banking and borrowing of emission permits is allowed. In our model, we compare the case of a regulator who sets the emission cap and price ceiling to be consistent with a long run emission objective with the case of a regulator who occasionally is motivated to deviate from the optimal long run regulatory policy in order to correct for unexpected but exceptionally high emissions. Using a discrete dynamic programming model with stochastic emissions, we show that the hybrid model gives the regulator a degree of freedom in making an optimal price and quantity choice. (C) 2014 Elsevier B.V. All rights reserved.
- Files in This Item
- There are no files associated with this item.
- Appears in
Collections - School of Economics > Economics Major > 1. Journal Articles
Items in ScholarWorks are protected by copyright, with all rights reserved, unless otherwise indicated.