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Incremental and Average Control Costs in a Model of Water Quality Trading with Discrete Abatement Units

机译：具有离散减排单位的水质贸易模型中的增量和平均控制成本

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This paper answers three questions related to the discrete nature of pollution abatement: (ⅰ) does a source's incremental control cost (as defined by the U.S. Environmental Protection Agency) necessarily exceed its average control cost, (ⅱ) is incremental control cost a better approximation of a source's willingness to pay for abatement credits than average control cost, and (ⅲ) exactly how does trading in discrete and continuous abatement markets differ? We find that the answer to the first two questions are both "no", suggesting that the U.S. Environmental Protection Agency needs to refine its reliance on incremental control cost as the sole measure upon which to assess the financial feasibility of water quality trading. In answer to the third question, we show that the outcome of bilateral trading in the presence of discrete abatement is determined by comparing the gains from trade associated with the full sequence of possible "sunk cost trading" scenarios. For the most common case where trading partners' average control cost curves "cross," the trading outcome with discrete abatement is inherently sensitive to the initial allocation of abatement responsibilities.
机译：本文回答了与减少污染的离散性有关的三个问题：（ⅰ）污染源的增量控制成本（由美国环境保护局定义）是否确实超过了其平均控制成本，（ⅱ）增量控制成本是更好的近似值吗？来源愿意支付的减排信用额比平均控制成本低；以及（ⅲ）离散和连续减排市场中的交易究竟有何不同？我们发现前两个问题的答案都是“否”，这表明美国环境保护局需要改善对增量控制成本的依赖，以此作为评估水质交易财务可行性的唯一措施。在回答第三个问题时，我们表明存在离散减排的双边贸易结果是通过比较与可能的“沉没成本交易”场景的全部序列相关的贸易收益来确定的。对于最常见的情况，即贸易伙伴的平均控制成本曲线“交叉”，具有离散减排量的交易结果固有地对减排责任的初始分配敏感。

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