ABSTRACT
The prior chapter presented simulations representing how an idealized cap-and-trade market might perform, given standard assumptions about its features. No underlying traditional regulations were assumed to be in place interacting with market design features such as the cap and banking horizon for tradable permits. The object was to show the theoretical effects of changes in the cap, transactions costs, and sub-area or spatial restrictions on the ability of a firm to trade. This preliminary analysis was carried out before the market got underway in an effort to anticipate the results of actual performance. This chapter now turns to recorded market performance and an analysis of the unanticipated outcomes.
