Environmental Policy and Speculation on Markets for Emission Permits
研究了投机者参与排放许可市场对预期收益和波动性的影响，并分析了在不同风险偏好下，投机行为如何影响环境政策制定和社会福利。
Speculators are active in large markets for emission permits such as those developing under the Kyoto Protocol. Since speculators help risk‐averse firms hedging the risk stemming from uncertain future demand, their entry reduces permits' expected returns and volatility. We characterize the optimal environmental policy by the agency setting the total amount of permits when speculators are active. Whenever the agency is sufficiently risk‐tolerant, speculators improve aggregate welfare by fostering firms' production. On the other hand, under a moderately risk‐averse agency, the increase in production volatility induced by speculators negatively affects social welfare.