Using contests to allocate pollution permits

MacKenzie, Ian A., Hanley, Nick and Kornienko, Tatiana (2009) Using contests to allocate pollution permits. Energy Policy, 37 7: 2798-2806. doi:10.1016/j.enpol.2009.03.030


Author MacKenzie, Ian A.
Hanley, Nick
Kornienko, Tatiana
Title Using contests to allocate pollution permits
Journal name Energy Policy   Check publisher's open access policy
ISSN 0301-4215
1873-6777
Publication date 2009-07-01
Sub-type Article (original research)
DOI 10.1016/j.enpol.2009.03.030
Open Access Status Not yet assessed
Volume 37
Issue 7
Start page 2798
End page 2806
Total pages 9
Place of publication London, United Kingdom
Publisher Elsevier
Language eng
Abstract In this paper we advocate a new initial allocation mechanism for a tradable pollution permit market. We outline a Permit Allocation Contest (PAC) that distributes permits to firms based on their rank relative to other firms. This ranking is achieved by ordering firms based on an observable ‘external action’ where the external action is an activity or characteristic of the firm that is independent of their choice of emissions in the tradable permit market. We argue that this mechanism has a number of benefits over auctioning and grandfathering. Using this mechanism efficiently distributes permits, allows for the attainment of a secondary policy objective and has the potential to be more politically appealing than existing alternatives.
Keyword Rank-order contests
Pollution permits
Initial allocation
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status Non-UQ

Document type: Journal Article
Sub-type: Article (original research)
Collection: School of Economics Publications
 
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Created: Thu, 25 Oct 2012, 01:30:42 EST by Alys Hohnen on behalf of School of Economics