Structural analyses of emission permit auctions under cap-and-trade programs in the United States
Abstract/Contents
- Abstract
- This dissertation conducts empirical studies on emission permit auctions under cap-and-trade programs in the United States. My dissertation for the first time conducts structural analyses using the actual auction data from the Acid Rain Program for SO2 and the Regional Greenhouse Gas Initiative (RGGI) program for CO2. With detailed bidder-level bidding data of the 17 discriminatory auctions of SO2 allowances held by the EPA from 1993 to 2009, I estimate bidders' marginal valuation functions using the resampling method proposed by Hortacsu (2002b) and Kastl (2011). I follow their econometric approaches to calculate the efficiency loss caused by the discriminatory format, and test its effectiveness in raising revenue compared to a truthful-bidding uniform price auction. Compared to a best-case scenario of truthful-bidding uniform price auction, the counterfactual results show that the discriminatory format may not necessarily raise more revenue to compensate the efficiency loss in the SO2 allowance auctions. To analyze the RGGI program, I modify a uniform price auction model built by Vives (2011) to characterize emission permit auctions with the presence of secondary trading. Based on the symmetric linear Bayesian demand function equilibrium (LBDFE), I analyze the interaction between the primary auction market and the secondary trading market of emission permits. I then propose a statistical procedure to calibrate model parameters using aggregate level data for the RGGI CO2 allowance auctions during August 2008 to June 2010. With a counterfactual simulation, I discuss the underpricing issue of the uniform price auction relative to the allowance prices in the trading market, and conclude that it is beneficial to open the auctions to general public to increase competition. Based on the empirical results for emission allowance auctions in these two programs, I propose several policy suggestions in designing future emission auctions.
Description
| Type of resource | text |
|---|---|
| Form | electronic; electronic resource; remote |
| Extent | 1 online resource. |
| Publication date | 2012 |
| Issuance | monographic |
| Language | English |
Creators/Contributors
| Associated with | Zhou, Xiaoling |
|---|---|
| Associated with | Stanford University, Department of Economics |
| Primary advisor | Goulder, Lawrence H. (Lawrence Herbert) |
| Thesis advisor | Goulder, Lawrence H. (Lawrence Herbert) |
| Thesis advisor | Boskin, Michael J |
| Thesis advisor | Hong, Han |
| Advisor | Boskin, Michael J |
| Advisor | Hong, Han |
Subjects
| Genre | Theses |
|---|
Bibliographic information
| Statement of responsibility | Xiaoling Charlene Zhou. |
|---|---|
| Note | Submitted to the Department of Economics. |
| Thesis | Thesis (Ph.D.)--Stanford University, 2012. |
| Location | electronic resource |
Access conditions
- Copyright
- © 2012 by Xiaoling Zhou
Also listed in
Loading usage metrics...