An annual discriminative and revenue-neutral auction is linked to the new Acid Rain Program which allows electric utilities all over the US to trade SO2 emission permits. This innovative SO2 auction distributes 2% of the permits in circulation and takes place at the Chicago Board of Trade. Early results showed that the auction generated a clearing price signal lower than the market price. Now the auction price seems to be determined by the outside market price. Still, in the important starting phase, a non-discriminative auction design would probably have generated better price signals since potentially severe downward biases in both seller price offers and buyer bids are due to the discriminative feature of the EPA auction. (au) 30 refs.


    Access

    Access via TIB

    Check availability in my library


    Export, share and cite



    Title :

    US SO(sub 2) AUCTION: A policy recommendation for future auctions


    Contributors:

    Publication date :

    1998


    Size :

    21 pages


    Type of media :

    Report


    Type of material :

    No indication


    Language :

    English