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To Trade or Not to Trade: Firm-Level Analysis of Emissions Trading in Santiago, Chile

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  • Coria, Jessica
  • Löfgren, Ã…sa
  • Sterner, Thomas
Abstract
Whether tradable permits are appropriate for transition and developing economies—given their special social and cultural circumstances, such as the lack of institutions and lack of expertise with market-based policies—is much debated. We conducted interviews and surveyed a sample of firms subject to emissions trading programs in Santiago, Chile, one of the first cities outside the OECD that has implemented such trading. The information gathered allowed us to study which factors affect the performance of the trading programs in practice and the challenges and advantages of applying tradable permits in less developed countries.

Suggested Citation

  • Coria, Jessica & Löfgren, Ã…sa & Sterner, Thomas, 2009. "To Trade or Not to Trade: Firm-Level Analysis of Emissions Trading in Santiago, Chile," RFF Working Paper Series dp-09-25-efd, Resources for the Future.
    • Handle: RePEc:rff:dpaper:dp-09-25-efd
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    References listed on IDEAS

    as
    1. Enrique Calfucura & Jessica Coria & José Miguel Sánchez, 2008. "Permisos Transables de Emisión en Chile: Lecciones, Desafíos y Oportunidades para Países en Desarrollo," Documentos de Trabajo 347, Instituto de Economia. Pontificia Universidad Católica de Chile..
    2. Palacios, Milagros & Chávez, Carlos, 2005. "Determinants of compliance in the emissions compensation program in Santiago, Chile," Environment and Development Economics, Cambridge University Press, vol. 10(4), pages 453-483, August.
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    4. Coria, Jessica & Sterner, Thomas, 2008. "Tradable Permits in Developing Countries: Evidence from air pollution in Santiago, Chile," Working Papers in Economics 326, University of Gothenburg, Department of Economics.
    5. Richard Schmalensee & Paul L. Joskow & A. Denny Ellerman & Juan Pablo Montero & Elizabeth M. Bailey, 1998. "An Interim Evaluation of Sulfur Dioxide Emissions Trading," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 53-68, Summer.
    6. Montero, Juan-Pablo & Sanchez, Jose Miguel & Katz, Ricardo, 2002. "A Market-Based Environmental Policy Experiment in Chile," Journal of Law and Economics, University of Chicago Press, vol. 45(1), pages 267-287, April.
    7. Lata Gangadharan, 2000. "Transaction Costs in Pollution Markets: An Empirical Study," Land Economics, University of Wisconsin Press, vol. 76(4), pages 601-614.
    8. Calfucura, Enrique & Coria, Jessica & Sánchez, José Miguel, 2009. "Permisos comerciables de emisión en Chile. Lecciones, desafíos y oportunidades para países en desarrollo," El Trimestre Económico, Fondo de Cultura Económica, vol. 0(304), pages 1027-1069, octubre-d.
    9. Robert N. Stavins, 1998. "What Can We Learn from the Grand Policy Experiment? Lessons from SO2 Allowance Trading," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 69-88, Summer.
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    Cited by:

    1. Caffera, Marcelo, 2011. "The use of economic instruments for pollution control in Latin America: lessons for future policy design," Environment and Development Economics, Cambridge University Press, vol. 16(3), pages 247-273, June.

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    More about this item

    Keywords

    tradable permits; developing countries; environmental policy; environmental institutions;
    All these keywords.

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations

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