Price Floors and Ceilings Crucial in Environmental Commodity Markets

摘要

Free markets are widely acknowledged to be the most efficient systems for allocation of scarce resources in an economy. Within this framework, speculative sources of capital that can anticipate future market imbalances can further strengthen this design. These sources allow purchases and sales by nonnatural users or producers of the commodity to bring a more rational view of supply and demand. For these market forces to work and provide the economic efficiency implied in a "free" market, it is necessary that there be no dominant buyers or sellers (including speculators).