Electricity sector restructuring and competition : lessons learned
Author(s)
Montero, Juan-Pablo
Date Issued
2004
Publisher
MIT Center for Energy and Environmental Policy Research
Series/Report no.
MIT-CEEPR (Series) ; 04-015WP.
Abstract
I explore the advantages of tradable emission permits over uniform emission standards when the regulator has incomplete information on firms₂ emissions and costs of production and abatement (e.g., air pollution in large cities). Because the regulator only observes each firm₂s abatement technology but neither its emissions nor its output, there are cases in which standards can lead to lower emissions and, hence, welfare dominate permits. I then empirically examine these issues using evidence from a particulate permits market in Santiago, Chile.
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