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This study develops the economic rationale for the inclusion of new environmental financial assets, tradable pollution rights, in a well‐diversified portfolio. These new assets are generated and their valuation determined in the market‐incentive environmental regulatory approach called emissions trading, especially the cap‐and‐trade variant. This approach has been gaining wide acceptance and approval. A leading example is the sulfur dioxide market where tradable allowances are assets that may be held by private investors. Transactions in this market have reached volumes indicative of a high degree of liquidity. Comparable tradable rights in other pollutants are under active development. We explain the design and workings of these markets and demonstrate empirically, on the basis of time series data, that sulfur dioxide allowances have rates of return and yield distributions that make them candidates for inclusion in asset portfolios. We conjecture that other tradable pollution rights will exhibit similar properties when sufficient data are available. Financial analysts and accountants are likely to play an increasing role in advising investors about the role of these assets in a well‐diversified portfolio.

Tanneries present heavy environmental impacts due to air emissions. Specific quality objectives are fixed by European Directives concerning air and, in particular, volatile organic compounds. The purpose of this paper is to present a proposal for the management of air emissions with a view to achieve quality standards in the Italy's largest tannery district by means of a tradable emissions permits (TEPs) system.

A methodological approach is presented and analysed. The proposed system is based on the “bubble” configuration, which appears to be an effective and feasible application based on the total maximum daily load criterion, supported by the air quality standards or the environmental risk assessment (ERA) procedure.

The TEP system favours technological improvements in the reduction of emissions. The system may not provide a solution to the unpleasant odours deriving from the tanneries, but its application supported by ERA will make it possible to define the admissible levels of air pollution and improve the general state of air quality.

Although the study is not exhaustive and requires further investigation in the economic, legal, administrative and air pollution sectors, it does give the basic elements for a preliminary analysis. The evident lack of experimental data concerning weather and climatic features, intrinsic to exposure assessment, has been pointed out.

This study proposes a methodological pathway aimed at defining the system of tradable permits by verifying the existence and availability of the necessary data. The proposed TEP system can be extended to other homogeneous industrial districts with an appropriate selection of one or more critical parameters.

This study aims to provide an estimation of carbon dioxide (CO₂) emission abatement costs in China’s industry sector during the period of 2006-2010, and additionally provide an ex-post estimation of CO₂ abatement cost savings that would be realized if carbon emission permits trading among different industry sectors of 30 provinces in China during the same period were allowed, to answer the question that whether the industrial carbon emission abatement cost can (partially) be recovered from carbon emission trading in China.

The joint production framework associated with the environmental technology is utilized for formulating the models for estimating abatement costs and simulating emission permits trading scheme. Several data envelopment analysis-based models that could deal with both the desirable and undesirable outputs within the above framework are utilized for abatement cost saving estimation. The weak disposability assumption and variable returns to scale assumption are applied in the modelling.

In China’s industry sector, during 2006-2010, the estimated CO₂ emission abatement cost was 1,842 billion yuan, which accounts for 2.45 per cent of China’s total industrial output value; the emission abatement cost saving from emission permits trading would be 315 billion yuan, which accounts for 17.12 per cent of the emission opportunity abatement cost; and additional 1,065.95 million tonnes of CO₂ emission reductions would be realized from emission permits trading, and this accounts for 4.75 per cent of the total industrial CO₂ emissions.

The estimation is implemented at the regional level, i.e. the emission permits trading subjects are the whole industry sectors in different Chinese provinces, because of the data limitation in this study. Further estimation could be implemented at the enterprise level to provide a deeper insight into the abatement cost recovery from emission permits trading.

The estimation models and calculation process introduced in this study could be applied for evaluating the efficiency and effectiveness of pollutant emission permits trading schemes from the perspective that whether these market-based abatement policy instruments help to realize the potential abatement cost savings.

To the best of the authors’ knowledge, no study has provided the estimation of CO₂ emission abatement cost and the estimation of CO₂ abatement cost saving effect from emission permits trading for China’s industry sector. This study provides the first attempt to fill this research gap.

Examines the economic factors that influenced chemical based agriculture in Australia and the adverse environmental effects of agrochemicals. Reports how technological change, government policies and institutions affected the environment through chemicals. Discusses the effectiveness of alternative policy measures in mitigating these adverse consequences.

IPv6 is the replacement for the internet's incumbent protocol, IPv4. IPv6 adoption is required to allow the internet to continue to grow; however, there has been almost no uptake since its standardization in the late 1990s. This paper seeks to explain how this non‐adoption may be a consequence of current policies paradoxically intended to promote IPv6.

Economic theories of exhaustible resources and permit markets are used to provide an explanation for the lack of adoption of IPv6.

The current policy approach will not yield a significant adoption of IPv6 until after the IPv4 address space is exhausted and may also constrain internet growth after IPv4 exhaustion occurs.

Current policies intended to promote IPv6 diffusion through the internet must be reconsidered. The economics of permit markets in particular can inform discussions about IPv4 address transfer markets.

Economic analyses of IPv6 adoption are almost non‐existent and very few prior studies are known. This paper helps to rectify this important gap in the literature.

A new financial asset (Allotment Trading Unit or ATU) that allows a firm to pollute was issued to a number of Chicago firms in 2000 as part of a cap‐and‐trade model to reduce emissions in the Chicago area. A model of this market was developed to enable us to: 1.) Estimate equilibrium tradable credit prices and quantities and calculate compliance costs for comparison with traditional environmental regulation; 2.) Estimate the consequences for prices and quantities of introducing changing emitter costs; and 3.) Estimate the impacts on prices and quantities of changing market features such as auctioning tradable credits instead of a free allocation, introducing spatial constraints, and changing the emissions cap. The model's results on the price determination of this new financial asset are of interest to accountants and financial analysts. A dated bankable ATU credit has a one‐year life expectancy, but future tradable credits can be bought or sold for use at the appropriate future date. It is an intangible asset that should be disclosed, measured and valued. The valuation to place on this asset is an important research topic in finance and accounting and various valuation approaches are discussed to handle the short‐term and long‐term price paths.

The purpose of this paper is to critically discuss the main advantages of introducing environmental regulation tools such as tradable permits markets.

Current climate policies, the negotiations under way at the international level, and past experiences with emissions trading in the USA and Europe are critically reviewed.

The creation of emissions trading schemes such as the European Union emissions trading scheme plays a key role in the preservation of the global public good that constitutes the climate.

This paper calls for the wider development of emissions trading schemes in climate change policy, given a careful design and regulatory appraisal from past experiences.

This paper reveals that the introduction of a tradable permits market (such as in Europe on 1 January 2005) which provides incentives to take early abatement measures, may be seen as a decisive first step to fight climate change.

Society has to find ways and means to reduce the emission of greenhouse gases, mainly carbon dioxide, to prevent global warming when considering inter‐generational equity with respect to environmental quality. The aim of the carbon dioxide emission control is to keep the level of carbon dioxide below a certain threshold level. This paper deals with the various policy instruments that are available to control greenhouse gases such as carbon dioxide. The criteria that should be used in selecting the appropriate policy instruments in controlling carbon dioxide emissions are: efficiency, equity and flexibility. Based on these criteria, the author is of the view that in the short‐run it is important for all the countries to ratify the Kyoto Protocol. However, in the long‐run, it may be possible to use the Kyoto targets to achieve an international carbon dioxide emission tradable permit system.

Curbing (without banning) potentially environmentally‐damaging activities that have global, rather than local, effects raises challenges analogous to those faced by a community lacking legislative powers that has to restrict access to a common pasture in order to make its use sustainable. A local community achieves autonomy in a matter such as this by consensual cooperation. In the absence of a world coercive authority, global environmental problems (in which a measure of world autonomy is needed) have to be met similarly by consensual co‐operation among governments. The conditions under which local consensual cooperation have been observed to be successful may also be relevant to global consensual cooperation. In particular there must be clear rules, and devices for interpreting them; they must be acceptable to all parties; and monitoring of compliance is crucial. Even in such cases of quasi‐voluntary compliance, graduated sanctions for infringement, or analogous arrangements, are quite likely to play a vital part. In an international regime for reducing greenhouse‐gas emissions, it is essential that rules should be devised that will appeal as fair and practically tolerable to opinion in both rich and poor countries and to both high and low per capita emitters. This will rule out a regime of uniform percentage reductions without balancing compensation. It will also rule out a regime based on equal per capita claims to engage in the restricted activity. It is desirable that the rules also act to make the allocation of the reductions in the potentially damaging activity efficient. This will favour rules under which financial signals reflecting marginal costs or benefits play some part in the allocation of any target aggregates. It will probably be essential, given prevalent views of justice and differing valuations of environmental goals between rich and poor nations, that the arrangements involve transfers of resources from richer, higher‐per‐capita polluting countries to poorer, lower per capita polluting countries. Nevertheless, reducing emissions sufficiently through a system of tradable quotas summing to the targeted total of emissions – which might seem to meet both this requirement and the need for efficient marginal incentives – has, in its simple form in which the quotas issued are proportional to countries’ populations, little chance of being acceptable to rich, high‐emitter nations. An attempt is made to explore solutions to these dilemmas, leading on from the arrangements made under the Kyoto protocol of the UN Framework Convention on Climate Change.

We develop an interactive framework to model speculation (over regulation) and regulation (of speculation) in a greenhouse gas (GHG) permits market. In our proposed model, big traders engage in speculation by strategically withholding and releasing permits to influence the temporal path of permit prices in order to maximize their profits. The national government/regulator has an incentive to stabilize permit prices by suitably manipulating stocks of permits. Thus, the GHG permits market can typically be characterized by circular interdependence in which big traders will be “gaming” the regulator to generate profits: the state of the market affects speculative behavior of traders that in turn impacts on government's behavior, which in turn impacts on the state of the market. The interactive framework explores the gaming between speculators and a regulator, or government, to shed crucial insights on the nature of equilibrium in possible global emissions trading schemes (GETS). By so doing, we are able to unravel potential pitfalls of any global trading system in pollution permits for arresting global warming. Once policy makers are aware of these pitfalls, for example, a “culture of speculation” as opposed to a culture of safety, they can devise a suitable mechanism to bypass these potential pitfalls.