Handbook on Experimental Economics and the Environment
Show Less

Handbook on Experimental Economics and the Environment

Edited by John A. List and Michael K. Price

Laboratory and field experiments have grown significantly in prominence over the past decade. The experimental method provides randomization in key variables therefore permitting a deeper understanding of important economic phenomena. This path-breaking volume provides a valuable collection of experimental work within the area of environmental and resource economics and showcases how laboratory and field experiments can be used for both positive and normative purposes.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 8: Investment decisions and emissions reductions: results from experiments in emissions trading

Lata Gangadharan, Rachel Croson and Alex Farrell


Over the past several decades, emissions trading has evolved from a suggestion by economists to a regulatory tool widely seen as highly successful (Farrell and Lave 2004). Examples include the well-established sulfur dioxide allowance trading program in the United States and the recent CO2 emission reduction credit program in Europe (Carlson et al. 2000; Boemare and Quirion 2002). Currently, emissions markets protect both human and ecosystem health, and in the process, result in billions of dollars changing hands. The application of emissions trading mechanisms will influence many decisions, including both operational (e.g., what fuel to purchase) and investment choices (e.g., when to purchase abatement technology). New patterns of investment may be among the most important outcomes of emissions trading programs. Investment in new technologies are needed to successfully deal with environmental challenges like global warming (Hoffert et al. 2002), and the incentives created by emissions trading programs can affect these decisions. This chapter uses an experimental economics approach to evaluate how individuals behave in emissions trading markets with opportunities for investment.

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.