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Cataloged Resource Summary

 

Title

An EPA-Style Auction of Pollution Permits

Author

Denise Hazlett

Categories

Public Goods
Auctions

Type

Non-computerized experiment

Description

This exercise simulates a Chicago Board of Trade auction of allowances to emit sulfur dioxide, one of the pollutants which causes acid rain. The CBOT began running these auctions in March of 1993 on behalf of the Environmental Protection Agency. The EPA uses the auctions as part of a market-based program to cut power company emissions of sulfur dioxide in half between the years 1990 and 2000. This simulation demonstrates the cost savings from using the market-based approach versus requiring an across- the-board cut in emissions.

URL

http://mcnet.marietta.edu/~delemeeg/expernom/s95.html#haz

Home URL

http://mcnet.marietta.edu/~delemeeg/expernom.html
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