This paper presents results of an empirical study of emission banking for light-duty vehicle manufacturers. An intertemporal model of manufacturers' choices is combined with econometrically estimated abatement cost functions to simulate the cost savings and emission effects of an averaging, trading, and banking marketable permit system relative to command-and-control regulations. While the cost savings of such a system are estimated to be modest, the intertemporal emission effects may be sizable. The sensitivity of the results to discount rates, abatement cost functions, and model specifications is also explored.
Cookie SettingseScholarship uses cookies to ensure you have the best experience on our website. You can manage which cookies you want us to use.Our Privacy Statement includes more details on the cookies we use and how we protect your privacy.