When Should Uncertain Nonpoint Emissions be Penalized in a Trading Program?

When nonpoint source pollution is stochastic and the damage function is convex, intuition might suggest it is more important to control a nonpoint pollution source than a point source. Earlier research has provided sufficient conditions such that the permit price for a unit of ex-ante expected emissions should be higher than the permit price for a unit of certain emissions. Herein we provide a set of necessary and sufficient conditions such that this is the case. An approach to testing for the validity of the condition set is available, and has been applied to a related problem.


Issue Date:
2007
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/9805
Total Pages:
16
JEL Codes:
Q1; Q2; D2; D8
Series Statement:
Selected Paper #172182




 Record created 2017-04-01, last modified 2017-08-23

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