Publications [#267365] of Billy Pizer

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Journal Articles

  1. Murray, BC; Newell, RG; Pizer, WA. "Balancing cost and emissions certainty: An allowance reserve for cap-and-trade." Review of Environmental Economics and Policy 3.1 (February, 2009): 84-103. [repository], [doi]
    (last updated on 2019/06/26)

    On efficiency grounds, the economics community has to date tended to emphasize price-based policies to address climate change -- such as taxes or a “safety-valve” price ceiling for cap-and-trade -— while environmental advocates have sought a more clear quantitative limit on emissions. This paper presents a simple modification to the idea of a safety valve -- a quantitative limit that we call the allowance reserve. Importantly, this idea may bridge the gap between competing interests and potentially improve efficiency relative to tax or other price-based policies. The last point highlights the deficiencies in several previous studies of price and quantity controls for climate change that do not adequately capture the dynamic opportunities within a cap-and-trade system for allowance banking, borrowing, and intertemporal arbitrage in response to unfolding information.

Billy Pizer