Consider a spatial pollution problem with J pollution sources and M recipients. The regulator is concerned that
Question:
Consider a spatial pollution problem with J pollution sources and M recipients. The regulator is concerned that M different permit markets will cause transaction costs to be too high. She decides to set up two trading regions, one with J1 sources and the other with J2 sources. Find a rule to determine the second-best number of permits for each region.
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In order to determine the secondbest number of permits for each region the regulator would need to take several factors into account including but not ...View the full answer
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Related Book For 
A Course In Environmental Economics
ISBN: 9781316866818
1st Edition
Authors: Daniel J Phaneuf, Till Requate
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