In this paper, authors explore the effects of uncertainty on pricing of pollution permits, through the use of a dynamic model of pollution markets. Authors consider two major sources of uncertainty - that arising from the volatility of demand for the underlying resource and that coming from the regulatory environment. Both sources of uncertainty are common in pollution permit trading as not only does the market respond to the volatility of fundamentals...
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INFORMACIÓN
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2011/06/09
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Documento de trabajo
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62488
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1
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1
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2011/06/13
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Disclosed
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The economics of pollution trading and pricing under regulatory uncertainty
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emission per unit of output