26 January 2009

Tradable Permits in Developing Countries

Globalisation and the Environment, January 21, 2009

I have fallen behind with my reading. I will be posting some academic abstracts in the next few days that will look at papers that I need to read but are (usually) related to "globalisation and the environment".

This first paper is related to the ETS and looks at how such a scheme can work in a developing country. Given the rise of China and India there are possible lessons to be learnt.

Tradable Permits in Developing Countries: Evidence from Air Pollution in Santiago, Chile [PDF]

Jessica Coria and Thomas Sterner


Santiago was one of the first cities outside the OECD to implement a tradable permit program to control air pollution. This paper looks closely at the program’s performance over the past ten years, stressing its similarities and discrepancies with trading programs implemented in developed countries, and analyzing how it has reacted to regulatory adjustments and market shocks. Studying Santiago’s experience allows us to discuss the drawbacks and advantages of applying tradable permits in less developed countries.

Key Words: Air pollution, environmental policy, tradable permits, developing countries

JEL Classification Numbers: Q53, Q58

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