"Multi-lateral emission trading:
Implications for international efforts from two U.S. examples."
Alexander E. Farrell and M. Granger Morgan.
Common property regimes that privatize international common pool resources
are often proposed as efficient means of managing environmental problems. One
such approach is the use of marketable emission allowances to control
atmospheric pollution, most common in the United States, which has been
suggested for the control of greenhouse gas (GHG) emissions in order to avoid
dangerous changes to the earth’s climate. A significant problem for the
development of such common property regimes is heterogeneity among potential
participants. Another is the set of practical difficulties associated with
establishing and operating an emission trading program. This problem is
exacerbated for the case of international GHG emissions by the lack of
examples of multi-lateral emissions trading programs from which lessons for
successful implementation can be drawn. This paper looks at two such efforts
to establish inter-state marketable emissions permit programs for the control
of nitrogen oxides (NOX) in the eastern United States, focusing on the
implications of heterogeneity among the participants and practical aspects of
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