DOWNLOADABLE WORKING PAPERS

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• The Tradable-Permits Approach to Protecting the Commons: Lessons for Climate Change OXFORD REVIEW OF ECONOMIC POLICY, VOL. 19, NO. 3, PP. 400-419 2003

  Abstract:Tradable-permit approaches for rationing access to the commons have been applied to many different types of resources in many different countries. This essay reviews the experience to draw together what we have learned about tradable permits in practice that might offer some useful insights for the implementation of the tradable-permit mechanisms that are part of the Kyoto Protocol.

• The Tradable Permits Approach to Protecting the Commons: What Have We Learned? (Written for National Research Council's Institutions for Managing the Commons Project.)

  Abstract: In this essay I review the experience with three main applications of tradable permit systems: air pollution control, water supply and fisheries management.Folowing a brief summary of the theory behind these programs and both the economic and environmental consequences anticipated by this theory, some brief points of comparison are made with other competing and/or complementary formal public policy strategies such as environmental taxes and legal regulation. The essay proceeds with a description of the common elements these programs share and the design questions posed by the approach. These include the setting of the limit on access, the initial allocation of rights, transferability rules (both among participants and across time) as well as procedures for monitoring and enforcement. It continues by examining how these design questions have been answered by the air pollution, fishery and water supply applications and how the answers have evolved over time. This evolution has been influenced by changing technology, increased familiarity with the system and a desire to respond to some of the controversies surrounding the use of these approaches. The penultimate section examines the hard evidence on the economic and environmental consequences of adopting these approaches. The final section draws together some tentative lessons that can be drawn from this experience. (172K)

• Empowering the Community: Information Strategies for Pollution Control (Written for the Frontiers of Environmental Economics Conference, Airlie House, Virginia, October 23-25, 1998. Co-authored with David Wheeler, Lead Economist, Development Research Group, World Bank.)

  Abstract: Disclosure strategies, which involve public and/or private attempts to increase the availability of information on pollution, form the basis for what some have called the third wave in pollution control policy (after legal regulation--the first wave--and market-based instruments --the second wave). While these strategies have become commonplace in natural resource settings (forest certification programs, for example), they are less familiar in a pollution control context. Yet both the research on, and experience with, this approach is now growing in both OECD and developing countries. This paper reviews what we know and don't know about the use of disclosure strategies to control pollution. (172K)

• Tradable Permit Approaches to Pollution Control: Faustian Bargain or Paradise Regained? (Written for Kaplowitz, M.D., ed. 1999. Property Rights, Economics, and the Environment. Stamford, CT: JAI Press Inc.

  Abstract: The idea of using the market to protect the environment has become almost a fad in U. S.policy circles and it has already spread to Latin America, Africa and the Far East. In this essay my objective is to trace the evolution of one significant component of this evolution, the use of tradable permits to control air pollution, from its earliest inception to recent developments. This evolution is used to show how the programs have changed over time in response to both changing circumstances and the lessons derived from the successes and failures of earlier experiences. (168K) 

• The UNCTAD Report

  Abstract: During December, 1997 the Kyoto Protocol authorized an emissions trading approach to controlling greenhouse gases (in Article 17), but left the implementation details up to subsequent meetings. The UNFCCC Secretariat asked the United Nations Conference on Trade and Development to commission a backround report on how this program could be implemented as a means of facilitating the negotiation process. This is the UNCTAD report. Written collaboratively by Michael Grubb, Axel Michaelowa, Byron Swift, Tom Tietenberg, ZhongXiang Zhang and Frank T. Joshua, a draft of this report was presented at the Bonn meetings and the final report was presented at the Buenos Aires meetings in November, 1998. (340K) 

• Design Issues Seeking Research Answers (Written for the Conference On Research Frontiers In GHG Emissions Trading, Resources for the Future, Inc., Washington, DC, January 15, 1999)

  Abstract: This report summarizes the author's sense of major research issues associated with implementing Article 17 of the Kyoto Protocol. (112K)

• Abstract: This paper explores the special problems faced in the management of environmental resources, paying particular attention to valuation of ecosystem services, externalities, uncertainty and the nonlinearities characteristic of complex adaptive, highly interconnected systems. Through consideration of case studies drawn from the management of lake and mangrove ecosystems, it analyzes the challenges, suggests approaches to their resolution, and endeavors to derive principles that may guide management more generally. Written collaboratively by Kenneth Arrow, Gretchen Daily, Partha Dasgupta, Simon Levin, Karl-Göran Mäler, Eric Maskin, David Starrett, Thomas Sterner and Tom Tietenberg, this report summarizes the results of a Beijer Institute Workshop on Institutions for Managing Ecological Services, Washington DC, April 11-12, 1999. (104K)

• Editor's Introduction to The Evolution of Emissions Trading: Theoretical Foundations and Design Considerations

  Abstract: This paper will be published as the editor's introduction to the first volume of a two-volume collection of previously published articles. The volumes will be published in the Environmental Economics Reference Series of Ashgate Press. While the first volume focuses on the evolution of the theoretical and design considerations, the second volume focuses more on the empirical research and actual implementation experience. (116K)