Environmental Markets (ESM 285)
Bren School of Environmental Science & Management
University of California, Santa Barbara
Winter 2012
December 1, 2011
Professor: Gary Libecap
Office: 4412 Bren Hall
Phone: 805-893-8611
Email: glibecap@bren.ucsb.edu
Class meetings: M & W 10:00-11:15 1510 Bren Hall
Office hours: M 9-10 or by appointment
Course Objective
This course presents the roles of property rights and markets in addressing environmental
and natural resource losses associated with the “Tragedy of the Commons.” Topics include:
 The open access problem
 Traditional Pigouvian tax and regulatory solutions
 Ronald Coase, Nobel Prize 1991, and Coasean trading
 Environmental markets in fisheries
 Environmental markets in water
 Environmental markets in conservation credits and tradable development rights
 Environmental markets in cap and trade emission permits
Other areas, such as environmental benefits in energy markets are not covered due to limited time. Students will learn when rights-based systems are valuable solutions to open
access losses and study the range of environmental markets. They will research and describe environmental markets.
Course Materials
Course readings include journal articles, book chapters, cases, and reports. There will be
guest lectures. All materials will be posted on Gauchospace.
Course Requirements
Students are expected to complete all of the assigned reading before class. Course discussion will be student led.
Requirements:
1. Students are required to turn in a one-two page powerpoint synopsis of the key points in
each required reading prior to class via Gauchospace and be ready to lead discussion.
2. Students also will be randomly selected in each class to report on an article or observation from Ecosystem Marketplace found at http://www.ecosystemmarketplace.com/ ;
Evolution Markets found at http://new.evomarkets.com/; or bgc Environmental Market.
These will be short 3-5 minute reports, no powerpoints or handouts are necessary.
3. There will be a final paper due the last day of spring term classes, 5pm, March 16,
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2012. Submitted via Gauchospace, 10 pages max with references. Topics to be discussed.
Course Grades
Course grades will be based on daily class powerpoints (30%); discussion leadership and
market reports (30%); and final paper (40%).
1/09 The Problem of Open Access. This is the fundamental problem that leads to
environmental degradation or loss and too rapid and wasteful natural resource extraction.
All students will understand this problem.
Readings:
Required:
 Garrett Hardin, 1968, “The Tragedy of the Commons,” Science 162: 1243-8.
 H. Scott Gordon, 1954, “The Economic Theory of a Common Property Resource:
The Fishery,” Journal of Political Economy 62(2): 128-35 only.
 Skim: T.R. Halliday, 1980, “The Extinction of the Passenger Pigeon Ectopistes Migratorius and Its Relevance to Contemporary Conservation,” Biological Conservation 17: 157-62.
 Skim: Dean Lueck, 2002, “The Extermination and Conservation of the American
Bison,” Journal of Legal Studies, 31 (S2): S609-650.
1/11 The Problem of Open Access Continued as Illustrated by the
Fishbank Game—MIT and Dartmouth. This game illustrates the problem of
open access and of coordination to mitigate its losses.
Required:
 Fishbank Game—Access information to be provided.
1/16 NO CLASS MLK HOLIDAY
1/18 Traditional Pigouvian Tax and Regulatory Solutions. We briefly review
command and control regulation and tax options.
Required:
 Charles Kolstad 2011, Environmental Economics 2nd Ed, New York: Oxford University Press. Chapter 11, “Regulating Pollution,” 219-240; Chapter 12, “Emission
Prices and Fees,” 241-261.
 Robert Stavins, 2007 “Market-Based Environmental Policies: What Can We Learn
from U.S. Experience (and Related Research), in Jody Freeman and Charles D.
Kolstad, eds, Moving to Markets in Environmental Regulation: Lessons from Twenty Years of Experience, New York; Oxford University Press, 19-47.
 Skim: Ian W.H. Parry 2003 “Theory and Application of Externality Taxes: Editor’s
Introduction” Public Finance and Management, 3(1), 1-11.
 Skim: Hilary Sigman, 2003 “Taxing Hazardous Waste: The US Experience,” Public Finance and Management, 3(1), 12-33.
 Skim: James Boyd, 2003 “Water Pollution Taxes: A Good Idea Doomed to Failure,” Public Finance and Management, 3(1), 34-66
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Extra
A.C Pigou, 1932, The Economics of Welfare, 4th Ed, NY: Macmillan.
William J. Baumol, 1972, “On Taxation and the Control of Externalities,” American Economic Review, 62(3): 307-322.
Louis Kaplow, and Steven Shavell, 2002. “On the Superiority of Corrective Taxes
to Quantity Regulation,” American Law and Economics Review, 4 (2002), 1-17.
Martin L. Weitzman 1974, “Prices vs. Quantities,” Review of Economic Studies
41(4): 477-491.
Lawrence H. Goulder, Ian W.H. Parry, Roberton C. Williams III, and Dallas Burtraw 1999, “The Cost-Effectiveness of Alternative Instruments for Environmental
Protection in a Second-Best Setting,” Journal of Public Economics 72: 329-360.
Antonio M. Bento, Lawrence H. Goulder, Mark R. Jacobsen, and Roger H. von
Haefen, 2009, “Distributional and Efficiency Impacts of Increased US Gasoline
Taxes,” American Economic Review 99: 667-699.
1/23 Property Rights and the Potential for Markets. Environmental markets
require some type of property right, formal or informal.
Required:
What is Property and What are Property Rights?
 Gary Libecap, 1989 Contracting for Property Rights, New York: Cambridge University Press, Chapter 2, “Analytical Framework,” 10-28 only.
 Yoram Barzel, 1997, Economic Analysis of Property Rights, New York: Cambridge
University Press, 2nd ed, Chapter 1, “The Property Rights Model,” 3-11 only.
 Harold Demsetz, 1967, “Toward a Theory of Property Rights,” American Economic
Review 57(2): 347-59.
 Thomas Merrill and Henry Smith, Property, New York: Oxford University Press,116, 43-50 only.
Extra
 Armen Alchian and Harold Demsetz, 1972, “Production, Information Costs, and
Economic Organization, American Economic Review, 62: 777-795.
 David A. Starrett, 2003, “Property Rights, Public Goods, and the Environment,
Chapter 3, Handbook of Environmental Economics, 97-104 only.
1/25 The Potential for Markets: Coasean Bargaining. Markets reallocate resources to higher valued uses and provide price information about alternatives. Coase addresses bargaining regarding environmental problems with different assumptions about
transaction costs.
Required:
 Ronald Coase, 1960, “The Problem of Social Cost,” Journal of Law and Economics
3: 1-44 only.
 Nathaniel Keohane and Sheila Olmstead, Markets and the Environment , 2007,
Washington: Island Press, “The Efficiency of Markets,” 54-63; Chapter 8, “Principles of Market-Based Environmental Policy,” 125-152; Chapter 9, “The Case for
Market-Based Instruments in the Real World,” 153-181.
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Charles Kolstad 2011, Environmental Economics 2nd Ed, New York: Oxford University Press. Chapter 13, “Property Rights,” 262-283.
Extra
David De Meza, 1998, “Coase Theorem,” The New Palgrave Dictionary of Economics and The Law. P. Newman, ed. New York: Macmillan, Vol. 1: 1270-282.
Robert Cooter, 1982, “The Cost of Coase,” The Journal of Legal Studies, 11(1):111 only.
R.H. Coase, 1974, “The Lighthouse in Economics, “Journal of Law and Economics 17: 357-76.
David E. Van Zandt, 1993, “The Lessons of the Lighthouse: “Government” or
“Private” Provision of Goods, “Journal of Legal Studies, 22(1) 47-72.
1/30 Fisheries: The General Failure of Regulation and Role of Property
Rights. Fisheries are the classic common pool resource and a resource where rights-based
management has grown dramatically.
Required:
 Jennifer Devine, Krista Baker and Richard Haedrich, 2006, “Fisheries: Deep-Sea
Fishes Qualify as Endangered,” Nature 439 January 5, 29.
 Ransom Myers and Boris Worm, 2003, “Rapid Worldwide Depletion of Predatory
Fish Communities,” Nature 432, May 15: 280.
 Rögnvaldur Hannesson, 2004, The Privatization of the Oceans, Cambridge: MIT
Press, Chapter 3, Property Rights in Fisheries, 43-68; Chapter 4, Toward Individual Use Rights, 69-83; and Conclusion 163-78.
 Skim: Ronald N. Johnson and Gary D. Libecap 1982. “Contracting Problems and
Regulation: The Case of the Fishery.” American Economic Review 72(5): 1005–22.
Extra
 FAO. 2001. The State of World Fisheries and Aquaculture. Food and Agricultural
Organization of the United Nations 2000
 Stephanie McWinnie, 2009, “The Tragedy of the Commons in International Fisheries: An Empirical Examination,” Journal of Environmental Economics and Management 57: 321-33.
 Nathaniel Keohane and Sheila Olmstead, Markets and the Environment , 2007,
Washington: Island Press, Chapter 7, “Stocks that Grow: The Economics of Renewable Resource Management,” 111-124 only.
 J.A. Crutchfield and G. Pontecorvo. 1969. The Pacific Salmon Fisheries: A Study
of Irrational Conservation. Baltimore: John Hopkins University Press.
 Frederick W. Bell, 1972. “Technological Externalities and Common-Property Resources: An Empirical Study of the U.S. Northern Lobster Fishery.” Journal of Political Economy 80(January-February): 148–58.
 Richard J. Agnello and Lawrence P. Donnelley, 1975, “Property Rights and Efficiency in the Oyster Industry,” Journal of Law and Economics 18 ( 2):521–33.
2/01 Fisheries: The Impact of Property rights and their Trade
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Required:
Christopher Costello, Steven Gaines, and John Lynham, 2008, “Can Catch Shares
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Prevent Fisheries Collapse?” Science 321., September 19: 1677-78.
Corbett Grainger and Christopher Costello. 2011. "The Value of Secure Property
Rights: Evidence from Global Fisheries." NBER Working Paper 17019.
Ragnar Arnason, 2008, “ Iceland’s ITQ System Creates New Wealth,” The Electronic Journal of Sustainable Development 1 (2).
Skim: R. Quentin Grafton, Dale Squires, and Kevin Fox. “Private Property and
Economic Efficiency: A Study of a Common-Pool Resource,” 2000 Journal of Law
and Economics. 43(2): 679-713.
Skim: Keith E. Casey, James Wilen, and Christopher Dewees. 1995. “The Effects
of Individual Vessel Quota in the British Columbia Halibut Fishery.” Marine Resource Economics 10(3): 211-30.
Distributional controversies:
http://www.scientificamerican.com/article.cfm?id=progress-in-solving-fisheriesprobl
Extra:
Donald R. Leal, Ed. 2005, Evolving Property Rights in Marine Fisheries, Lanham,
MD: Rowman and Littlefield.
Nathaniel Keohane and Sheila Olmstead, 2007, Markets and the Environment ,
2007, Washington: Island Press, Chapter 10, Market Based Instruments in Practice:
“Individual Tradable Quotas for Fishing in New Zealand,” 190-194.
Ragnar Arnason, 2002, “A Review of International Experiences with ITQs,”
CEMARE Report 58, University of Portsmouth.
Christopher Costello, Leah Gerber, and Steven Gaines, 2011, “Whale Conservation
Markets,” Working Paper UCSB.
Ragnar Arnason, 2012. “Individual Transferable Quotas in Fisheries.” in Jason
Shogren ed, Encyclopedia of Resource, Energy and Environmental Economics.
Elsevier. Forthcoming.
2/06 Fisheries: Trading and Effects on stock
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Required:
Richard G. Newell, James N. Sanchirico, and Suzi Kerr 2005, “ Fishing Quota
Markets, “Journal of Environmental Economics and Management, 49(3): 437-462.
Rögnvaldur Hannesson, 2008, “Sustainability of Fisheries,” The Electronic Journal
of Sustainable Development (2008) 1(2)
Cooperation using Markets for Management on the Central California Coast.
http://www.nytimes.com/2006/08/08/science/earth/08fish.html?pagewanted=all
Cooperation using Markets for Management on the Central California Coast.
http://www.nytimes.com/2011/11/28/science/earth/nature-conservancy-partnerswith-california-fishermen.html
Cooperation using Markets for Management on the Central California Coast. The
Nature Conservancy:
http://www.nature.org/ourinitiatives/regions/northamerica/unitedstates/california/ho
wwework/california-coastal-and-marine-program.xml?s_intc=tab1p3
IFQs (Individual Fishing Quotas). Skim readings in:
http://ifqsforfisheries.org/resources/index.php
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Extra:
R. Newell, K. Papps, and J. N. Sanchirico. 2007, “Asset Pricing in Created Markets for Fishing Quota.” American Journal of Agricultural Economics. 89(2): 259–
272.
James Sanchirico,2003, “ Managing Marine Capture Fisheries with Incentive
Based Price Instruments.” Public Finance and Management, .3(1): 67-93.
R. Quentin Grafton, Ray Hilborn, Dale Squires, Maree Tait, and Meryl Williams,
eds., 2010, Handbook of Marine Fisheries Conservation and Management, New
York: Oxford University Press.
2/08 Water. Water Rights and Institutions. Water may be the most misallocated
and mismanaged resource. The role of property rights and markets.
Required:
 Gary D. Libecap, 2011, “Water Rights and Markets in the U.S. Semi-Arid West: Efficiency and Equity Issues,” in Daniel Cole and Elinor Ostrom, eds, The Evolution
of Property Rights to Land and Other Natural Resources, Cambridge, MA: The
Lincoln Institute, Chapter 13.
 Gary D. Libecap, 2010, “The Economic Institutions of Water,” NBER Reporter, 4,
November.
 Gary D. Libecap, 2011, Institutional Path Dependence in Climate Adaptation: Coman’s “Some Unsettled Problems of Irrigation” American Economic Review 101:
64-80.
 Gary D. Libecap, 2010, “Water Woes: Using Markets to Quench the Thirst of the
American West,” Milken Institute Review October: 58-68.
 Henry Smith, 2008. “Governing Water: The Semicommons of Fluid Property
Rights.” Arizona Law Review 50: 445-78.
Extra
 Terry Anderson and Ronald N. Johnson. 1986. “The Problem of Instream Flows.”
Economic Inquiry 24 (4): 535-53.
 Ronald N. Johnson, Micha Gisser, and Michael Werner. 1981. The Definition of a
Surface Water Right and Transferability. Journal of Law and Economics 24 (2):
273-88.
• Bill Provencher and Oscar Burt 1993, “The Externalities Associated with the
Common Property Exploitation of Groundwater,” Journal of Environmental Economics and Management, 24, 139-58.
• Robert Ward and James Booker, “Economic Costs and Benefits of Instream Flow
Protection for Endangered Species in an International Basin,” Journal of the American Water Resources Association 39 (2003): 427-440.
• Brandon Scarborough and Hertha Lund. 2007. Saving Our Streams: Harnessing
Water Markets. Bozeman, MT: PERC.
 Barton H. Thompson, 1993, “Institutional Perspectives on Water Policy and Markets,” 81 California Law Review, 673-764.
2/13 Water Markets
Required:
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Jedidiah Brewer Robert Glennon, Alan Ker, Gary D. Libecap, 2008, “Water Markets in the West: Prices, Trading, and Contractual Flows,” Economic Inquiry 46(2):
91-112.
Chong, Howard and David Sunding. 2006. Water markets and trading. Annual Review of Environment and Resources 31:239-264.
R. Quentin Grafton, Gary Libecap, Samuel McGlennon, Clay Landry, and Bob O
Brien, 2011, “An Integrated Assessment of Water Markets: A Cross-Country Comparison,” Review of Environmental Economics and Policy 5(2): 219-39.
Extra
David T. Fractor, 1988, “Privatizing the Ground Water Resource: Individual Use
and Alternative Specifications,” Water Resources Bulletin 24(2): 405-13.
Richard Wahl, 1989, Markets for Federal Water: Subsidies, Property Rights, and
the Bureau of Reclamation. Washington, DC: Resources for the Future.
Janis M. Carey and David L. Sunding 2001, “Emerging markets in Water: a Comparative Analysis of the Central Valley and Colorado Big Thompson Projects”,
Natural Resources Journal 41 (Spring): 283-328.
Ellen Hanak, 2003, Who Should be Allowed to Sell Water in California? ThirdParty Issues and the Water Market, San Francisco: Public Policy Institute of California.
Sheila M. Olmstead, 2010. “The Economics of Managing Scarce Water Resources”
Review of Environmental Economics and Policy 4:179-198.
Charles W. Howe, 2002, “Policy Issues and Institutional Impediments in the Management of Groundwater: Lessons from Case Studies,” Environment and Development Economics 7(4): 625-641.
Holland, Stephen P. and Michael R. Moore 2003, “Cadillac Desert Revisited: Property Rights, Public Policy, and Water-Resource Depletion,” Journal of Environmental Economics and Management 46(1): 131-155.
Daniel D. Huppert, Daniel D. 1999, “Snake River Salmon Recovery: Quantifying
the Costs,” Contemporary Economic Policy 17(4): 476-491.
2/15 Water: Market and Management Issues
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Required:
Gary D. Libecap, 2009, “Chinatown Revisited: Owens Valley and Los Angeles—
Bargaining Costs and Fairness Perceptions of the First Major Water Rights Transfer,” Journal of Law Economics and Organization 25(2): 311-37.
Jedidiah Brewer Jedidiah and Gary D. Libecap, 2009, “Property Rights and the
Public Trust Doctrine in Environmental Protection and Natural Resource Conservation,” Australian Journal of Agricultural and Resource Economics ;53:1-17.
Freshwater Trust: http://www.thefreshwatertrust.org/
Janet Neuman 2004, ‘The Good, the Bad, and the Ugly: The First Ten Years of the
Oregon Water Trust’, Nebraska Law Review, 83, 432, 439–40.
Brandon Scarborough, 2010, Environmental Water Markets: Restoring Streams
Through Trade PERC Policy Series 46.
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Jeffrey Michael, Richard Howitt, Josué Medellín-Azuara, and Duncan MacEwan ,
2010, A Retrospective Estimate of the Economic Impacts of Reduced Water Supplies to the San Joaquin Valley in 2009
Extra
Jean Marc Bourgeon, K. William Easter, Rodney B.W. Smith, 2008, “Water Markets and Third Party Effects,” AJAE 90(4) 902-17.
Roy Gardner, Michael Moore, and James Walker, 1997, “Governing a Groundwater Commons: A Strategic and Laboratory Analysis of Western Water,” Economic
Inquiry 35: 218-34.
Hanna L. Breetz, Karen Fisher-Vanden, Hannah Jacobs, and Claire Schary 2005,
“Trust and Communication: Mechanisms for Increasing Farmers’ Participation in
Water Quality Trading,” Land Economics 81(2): 170-190.
Sarah Lynch and Leonard Shabman, 2011, “Designing a Payment Scheme for Environmental Services Program for the Northern Everglades,” National Wetlands
Newsletter 33(4): 12-15.
Sarah Lynch and Leonard Shapman, 2011 “Regulatory Challenges to Implementing
a Payment for Environmental Services Program,” National Wetlands Newsletter
33(6): 18-21.
Dan Tarlock and Holly Doremu, 2003, “ Fish, Farms, and the Clash of Cultures in
the Klamath Basin,” Ecology Law Quarterly, 30: 279, 306–16.
D. Garrick., M.A. Siefentritt, B. Aylaward, C.J. Bauer, and A. Purkey. 2009. “Water Markets and Freshwater Ecosystem services: Policy Reform and Implementation in the Columbia and Murray-Darling Basins.” Ecological Economics 69:366379.
R. Scott Farrow, Martin T. Schultz, Pinar Celikkol, and George L. Van Houtven
2005, “Pollution Trading in Water Quality Limited Areas: Use of Benefits Assessment and Cost-effective Trading Ratios,” Land Economics 81(2): 191-205.
Nathaniel Keohane and Sheila Olmstead, 2007, Markets and the Environment ,
2007, Washington: Island Press, “Municipal Water Pricing, Water Quality Trading,”
Chapter 10, 195- 201.
Leonard Shabman, Kurt Stephenson and William Shobe. 2002. “Trading Programs
for Environmental Management: Reflections on the Air and Water Experiences.”
Environmental Practice 4 (3): 153-162.
2/20 NO CLASS PRESIDENTS’ DAY HOLIDAY
2/22 Tradable Development Rights
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Required
Nathaniel Keohane and Sheila Olmstead, 2007, Markets and the Environment ,
Washington: Island Press, “ Habitat and Land Management,” 201-206.
Virginia McConnell and Margaret Walls, 2009, “Policy Monitor: U.S. Experience
with Transferable Development Rights,” Review of Environmental Economics and
Policy, Summer: 288-303.
Margaret Walls and Virginia McConnell, 2007, Transfer of Development Rights in
U.S. Communities: Evaluating Program Design, Implementation, and Outcomes,
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Resources for the Future, September: 8-27, skim 28-131.
Conservation Credit Exchanges: At least 13 states have conservation credits exchanges. South Carolina: http://www.conservesc.com/; Virginia and New Mexico:
http://conservationcreditexchange.com/; http://www.vcce.net/;
http://dcr.virginia.gov/land_conservation/lpc.shtml; Colorado:
http://www.coloradocredits.com/; Georgia:
http://glcp.georgia.gov/00/channel_title/0,2094,82613131_114687036,00.html;
More generally in Ecosystem Marketplace:
http://www.ecosystemmarketplace.com/pages/dynamic/article.page.php?page_id=7
546&section=news_articles&eod=1
Extra
Lynn Scarlett and James Boyd, 2011, “Ecosystem Services: Quantification, Policy
Applications, and Current Federal Capabilities,” RFF Discussion Paper 11-13.
James Boyd and Lisa Wainger, 2003, “Measuring Ecosystem Service Benefits: The
Use of Landscape Analysis to Evaluate Environmental Trades and Compensation,”
RFF Discussion Paper, 02-63.
Elizabeth Kopits, Virginia McConnell, and Margaret Walls, 2008, “Making Markets
for Development Rights Work: What Determines Demand?” Land Economics 94
(1): 1-16.
Virginia McConnell, Margaret Walls, and Elizabeth Kopits,2006, “Zoning, TDRs,
and the Density of Development,” Journal of Urban Economics, 59 (3): 440-457.
2/27 Cap and Trade in Air Pollution Control. This is the most well known environmental market.
Required:
Two Views
 A critical view: Video: Annie Leonard presents the story of cap and trade:
http://www.storyofstuff.com/capandtrade/
 Nat Keohane presents the facts of cap and trade:
http://www.youtube.com/watch?v=fwN1OwdUkgg
 A. Denny Ellerman, 2007, “Are Cap-and-Trade Programs More Environmentally
Effective than Conventional Regulation” in Jody Freeman and Charles D. Kolstad,
eds. Moving to Markets in Environmental Regulation: Lessons from Twenty Years of
Experience. New York Oxford University Press, 48-62.
 Tom Tietenberg, 2007, “Tradable Permits in Principle and Practice,” in Jody Freeman and Charles D. Kolstad, eds, Moving to Markets in Environmental Regulation:
Lessons from Twenty Years of Experience, New York; Oxford University Press, 6394.
Extra
 Tom Tietenberg, 2006, Emissions Trading Principles and Practice Washington: RFF
Press.
 J.H. Dales, 1968, Pollution, Property and Prices: An Essay in Policy-making and
Economics Toronto: University of Toronto Press.
2/29 Cap and Trade in Air Pollution Control: National
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Required:
Lead Phase Down
Richard G. Newell and Kristian Rogers, 2007, “The Market-Based Lead
Phasedown,” in Jody Freeman and Charles D. Kolstad, eds, Moving to Markets in
Environmental Regulation: Lessons from Twenty Years of Experience, New York;
Oxford University Press, 2007, 171-193.
SO2 Markets
Nathaniel Keohane and Sheila Olmstead, Markets and the Environment, 2007,
Washington: Island Press, “The U.S. Sulfur Dioxide Market,” 183-190.
Nathaniel Keohane, 2007, “Cost Savings from Allowance Trading in the 1990
Clean Air Act: Estimates from a Choice Based Model,” in Jody Freeman and
Charles D. Kolstad, eds, Moving to Markets in Environmental Regulation: Lessons
from Twenty Years of Experience, New York; Oxford University Press, 194-229.
Skim: Dallas Burtraw, David A. Evans, Alan Krupnick, Karen Palmer, and Russell
Toth. 2005. “Economics of Pollution Trading for SO2 and NOx,” Annual Review of
Environment and Resources, 30: 253-289
Extra
Dallas Burtraw and Sarah Jo Szambelan, 2009, U.S. Emissions Trading Markets for
SO2 and NOx,” RFF Discussion Paper 09-40.
Stavins, Robert N. 1998. “What Can We Learn from the Grand Policy Experiment?
Positive and Normative Lessons from SO2 Allowance Trading.” Journal of Economic Perspectives, 12(3): 69-88.
Dallas Burtraw and Erin Mansur. 1999. “The Environmental Effects of SO2 Trading and Banking” Environmental Science and Technology 33(20): 3489-3494 (October 15).
Curtis P.Carlson, Dallas Burtraw, Maureen Cropper, and Karen Palmer 2000, “SO2
Control by Electric Utilities: What are the Gains from Trade?” Journal of Political
Economy, 108 (6): 1292-1326.
A. Denny Ellerman, Paul L. Joskow, Richard Schmalensee, Juan-Pablo Montero,
and Elizabeth Bailey 2000, Markets for Clean Air: The U.S. Acid Rain Program.
Cambridge University Press.
Paul L. Joskow and Richard Schmalensee 1998. “The Political Economy of Market-based Environmental Policy: The U.S. Acid Rain Program.” Journal of Law
and Economics 41 (April 1998): 37-83.
3/05 Cap and Trade in Air Pollution Control: Regional and Local
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Required:
RECLAIM
US EPA. 2006. “An Overview of the Regional Clean Air Incentives Market.”
Washington,D.C.
Annual Report/Review: http://aqmd.gov/reclaim/reclaim_annurpt.htm
Skim: US EPA. 2002. “ An Evaluation of the South Coast Air Quality Management
District’s Regional Clean Air Incentives Market - Lessons in Environmental Markets and Innovation” Washington D.C. 1-70.
RGGI
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Regional Greenhouse Gas Initiative webpage: http://rggi.org/
New Jersey leaves RGGI: http://www.environmentalleader.com/2011/05/27/newjersey-pulls-out-of-rggi-bans-coal-plants/
States Use of Funds http://www.stateline.org/live/details/story?contentId=494460
Skim: Paul M. Bernstein, W. David Montgomery, and Sugandha Tuladhar.2004,
“Economic Consequences of Northeastern State Proposals to Limit Greenhouse
Gas Emissions from the Electricity Sector (RGGI).” Charles River Associates Incorporated.
AB32
Overview via CARB: http://www.arb.ca.gov/cc/cc.htm
Michael Hanemann, 2008, “California’s New Greenhouse Gas Laws Review of
Environmental Economics and Policy, 2 (1): 114–129
Skim: Emission Permits Allocations 2010
Skim: Controversy--http://suspendab32.org/
Extra
Olivier Deschênes, Michael Greenstone, and Joseph S. Shapiro, 2011, “Defending
Against Environmental Insults: Drugs, Emergencies, Deaths, and the NOx Emissions Markets” working paper, UCSB.
Meredith Fowlie, Stephen P. Holland, and Erin T. Mansur, 2009, “What do Emissions Markets Deliver and to Whom? Evidence from Southern California’s NOx
Trading Program,” NBER Working Paper 15082
3/07 Cap and Trade in Air Pollution Control: International
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Required
EU ETS
A. Denny Ellerman and Barbara K. Buchner, 2007, The European Union Emissions
Trading Scheme: Origins, Allocation, and Early Results,” Review of Environmental
Economics and Policy, 1(1): 66–87.
A. Denny Ellerman and Paul L. Joskow. 2008, The European Union’s Emissions
Trading System in Perspective. Washington, DC: Pew Center on Global Climate
Change.
A. Denny Ellerman and Barbara K. Buchner, 2008, “Over-Allocation or Abatement? A Preliminary Analysis of the EU ETS Based on the 2005–06 Emissions Data,” Environment and Resource Economics 41:267–287.
Extra
Bushnell, James B., Howard Chong, and Erin T. Mansur, 2009, “Profiting from
Regulation: An Event Study of the European Carbon Market,” NBER working paper 15572
Juan Pablo Montero, Jose Miguel Sancez and Ricardo Katz, 2002, “ A MarketBased Environmental Policy Experiment in Chile,” Journal of Law and Economics
45: 267-287.
Juan-Pablo Montero, 2007, “Tradable Permits with Incomplete Monitoring: Evidence from Santiago’s Particulate Permits Program,” in Jody Freeman and Charles
D. Kolstad, eds, Moving to Markets in Environmental Regulation: Lessons from
11
Twenty Years of Experience, New York; Oxford University Press, 2007, 147-170.
3/12 Place holder for outside presenter.
3/14 If available: Market limitations—failure, enforcement, free riding, scale
 Robert Stavins. "A Meaningful U.S. Cap-and-Trade System to Address Climate
Change." Harvard Environmental Law Review 32(2008): 293-371.
 Dieter Helm (2008), “Climate-Change Policy: Why Has So Little Been Achieved?”
Oxford Review of Economic Policy, 24 (2): 211–238.
3/16 Final paper due, 5 pm. Posted on Gauchospace.
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