Uncertainty and speculators in an auction for emissions permits

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• 作者：Corina Haita-Falah
• 刊名：Journal of Regulatory Economics
• 出版年：2016
• 出版时间：June 2016
• 年：2016
• 卷：49
• 期：3
• 页码：315-343
• 全文大小：1,270 KB
• 刊物类别：Business and Economics
• 刊物主题：Economics
  Industrial Organization
  Public Finance and Economics
  Microeconomics
  
• 出版者：Springer Netherlands
• ISSN：1573-0468
• 卷排序：49

文摘

Auctions have become popular as means of allocating emissions permits in the emissions trading schemes developed around the world. Mostly, only a subset of the regulated polluters participate in these auctions along with speculators, creating a market with relatively few participants and, thus, incentive for strategic bidding. I characterize the bidding behavior of the polluters and the speculators, examining the effect of the latter on the profits of the former and on the auction outcome. It turns out that in addition to bidding for compliance, polluters also bid for speculation in the aftermarket. While the presence of the speculators forces the polluters to bid closer to their true valuations, it also creates a trade-off between increasing the revenue accrued to the regulator and reducing the profits of the auction-participating polluters. Nevertheless, the profits of the latter increase in the speculators’ risk aversion.KeywordsCap-and-trade programEmissions tradingRisk aversionSpeculatorsUniform-price auction