کد مقاله | کد نشریه | سال انتشار | مقاله انگلیسی | نسخه تمام متن |
---|---|---|---|---|
985536 | 1480682 | 2015 | 13 صفحه PDF | دانلود رایگان |
• The optimal hybrid emission control policy extended to a multi-period framework.
• A degree of freedom in combining an optimal price and quantity instruments.
• Tension between the long-run and the short-run optimal hybrid emission control policy.
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.
Journal: Resource and Energy Economics - Volume 39, February 2015, Pages 16–28