Using contests to allocate pollution rights

MacKenzie, I. A., Hanley, N. and Kornienko, T. (2009) Using contests to allocate pollution rights. Energy Policy, 37(7), pp. 2798-2806. (doi: 10.1016/j.enpol.2009.03.030)

Full text not currently available from Enlighten.

Abstract

In this paper we advocate a new initial allocation mechanism for a tradable pollution permit market. We outline a Permit Allocation Contest (PAC) that distributes permits to firms based on their rank relative to other firms. This ranking is achieved by ordering firms based on an observable ‘external action’ where the external action is an activity or characteristic of the firm that is independent of their choice of emissions in the tradable permit market. We argue that this mechanism has a number of benefits over auctioning and grandfathering. Using this mechanism efficiently distributes permits, allows for the attainment of a secondary policy objective and has the potential to be more politically appealing than existing alternatives.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Hanley, Professor Nicholas
Authors: MacKenzie, I. A., Hanley, N., and Kornienko, T.
College/School:College of Medical Veterinary and Life Sciences > School of Biodiversity, One Health & Veterinary Medicine
Journal Name:Energy Policy
Publisher:Elsevier
ISSN:0301-4215
ISSN (Online):1873-6777
Published Online:17 April 2009

University Staff: Request a correction | Enlighten Editors: Update this record