CaltechAUTHORS (California Institute of Technology) · 1993 · 19 citations · 0 references
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Public AffairsEnvironmental EngineeringAir Quality ManagementAir Quality PolicyRegulatory ComplianceAir Pollution RegulationClean Air LegislationEconomic Instruments For Pollution ControlEmissions TradingMarket-based Environmental PolicyTrade CreditCarbon Credit TradingEmission Reduction Credit TradingEnvironmental Credit MarketsMarket-based Emissions AccountingMarket-based Environmental RegulationMarket-based Pollution InstrumentsPollution TradingPrice Volatility Effects
The South Coast Air Quality Management District (AQMD) has proposed an annual RECLAIM Trading Credit (RTC) with uniform issue and compliance dates as the trading instrument for its market-based regulatory program. The proposed design for this instrument carries potential problems for both RECLAIM facilities and AQMD, including \nmarket imbalances, price volatility, economic inefficiencies, and an increase in ambient emission peaks. These problems result directly from the design of the instrument, and they can be alleviated through the selection of alternate design variables and a change in the allocation of RTCs to RECLAIM facilities. Both the problems and the effectiveness of the solutions have been tested and documented in experiments conducted in the Laboratory for Experimental Economics and Political Science at the California Institute of Technology.