The Economics of Pollution Permit Banking in the Context of Title IV of the 1990 Clean Air Act Amendments

By Susanne M. Schennach. 2000

287 citations recorded by the source corpus.

Abstract This paper presents a model of the collective emission permit banking behavior of electricity-generating units affected by Title IV of the Clean Air Act Amendments of 1990. A rigorous treatment of the constraint that pollution permits cannot be borrowed from future allocations is introduced. This approach enables an analysis of the impact of future changes in electricity demand, regulations, and technologies on the present permit price and emissions level. The effect of uncertainty on the banking behavior is also explored.

Subfields: Economics and Econometrics, Renewable Energy, Sustainability and the Environment

View Paper: https://www.semanticscholar.org/paper/ee451538c04fc3b3d336a51ded1dec4a37cced4b

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Citations in the corpus

Dynamic behavior of CO2 spot prices (2008, background): “[6] extends the work of [3] by assuming expected total cost minimizing companies.”
Procrastinating reform: The impact of the market stability reserve on the EU ETS (2016, methodology): “We start by specifying and solving a baseline case (B) of an intertemporal allowance market with banking and without borrowing, which is well established in the literature (see e.g. Cronshaw & Kruse, 1996; Rubin, 1996; Schennach, 2000; Ellerman et al., 2015).”
European Carbon Prices and Banking Restrictions: Evidence from Phase I (2005-2007) (2009, unknown): “First, Schennach (2000) studies the banking behavior of regulated indus-trials in the U.S. Acid Rain Program, and implicitly the behavior of spot prices, in a stochastic, continuous-time, infinite horizon model for allowance allocation, use and storage.”
What explains the short-term dynamics of the prices of CO2 emissions? (2014, background): “For instance, Rezek (1999) focuses on the importance of changes in technological parameters and Schennach (2000) assesses the impact of electricity demand on the SO2 permits’ prices.”
Managing Permit Markets to Stabilize Prices (2005, background): “Introduction....................................................................................................................... 1 2.”
Prices Versus Quantities Versus Bankable Quantities (2012, background): “4 As a result of competitive trading, the collective behavior of firms is similar to the behavior of a single social planner (Rubin, 1996; Schennach, 2000).”
The Endogenous Price Dynamics of Emission Allowances and an Application to CO2 Option Pricing (2012, unknown): “Schennach ( 2000 ) attempts to overcome this limitation by extending Rubin's model (1996).”