Cap-and-trade policy challenges: a tale of three markets.

摘要

Cap-and-trade policy instruments have been applied to a number of environmental problems, with varying success. This paper examines cap-and-trade programmes for SO2 allowances, fishery quotas, and water rights in the USA. Design and implementation of cap-and-trade mechanisms involves challenging policy tradeoffs: accommodating equity concerns, balancing use levels with resource conditions, facilitating transactions, accounting for externalities, assuring adequate monitoring, and documenting welfaregains. Efficient trading mechanisms are more readily implemented when there is a strong political or legal mandate to cap resource use and trades are perceived as a means to ease adjustment to use limits.