TITLE

Transaction Costs in Pollution Markets: An Empirical Study

AUTHOR(S)
Gangadharan, Lata
PUB. DATE
November 2000
SOURCE
Land Economics;Nov2000, Vol. 76 Issue 4, p601
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
This paper studies a market in pollution permits launched in Los Angeles in 1994. This tradable permit market has been projected to lead to substantial cost savings due to the flexibility it provides firms in terms of compliance with environmental regulation. This paper shows that transaction costs can play an important role in the initial years of the program. The transaction cost variables have been defined to include search costs and information costs. These costs are significant in explaining non-participation of some firms in the market. The study also draws policy implications for the development of future emissions trading programs.
ACCESSION #
3926290

 

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