Lessons from Phase 2 compliance with the U.S. Acid Rain Program
Name
2003-009.pdf
Size
405.79 KB
Format
Adobe PDF
Checksum (MD5)
7b88ac55745f4761bf625a0d9a3709e8
Author(s)
Ellerman, A. Denny
Date Issued
2003
Publisher
MIT Center for Energy and Environmental Policy Research
Series/Report no.
MIT-CEEPR (Series) ; 03-009WP.
Abstract
This paper provides preliminary answers to four questions concerning the behavior of agents operating under the SO2 Allowance Trading Program that could not be adequately answered until several years' data on compliance behavior in the final Phase II could be observed. The four questions are: 1. How is abatement distributed geographically when all fossil-fuel-fired electricity generating units are included? 2. Will agents draw down the accumulated Phase I bank, as expected and more or less efficiently, during Phase II? 3. Is there any evidence that the failure to endow new generating units with allowances constitutes a barrier to entry? 4. What can be said about the cost of the SO2 Allowance Trading Program in Phase II when all units are included and when it is fully phased in?
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