ABSTRACT
The utilization of markets to address environmental problems is not a new concept. Over the last three decades economists have applied economic markets in addressing such environmental problems as the removal of lead from gasoline (Kerr and Newell, 2005), the reduction of acid rain producing sulfur dioxide from the atmosphere (Bellas and Lange, 2008) and the limiting of carbon dioxide emissions (Burtraw and Evans, 2008). Markets have also been successfully used outside of the environmental policy arena to address policy problems made complex by the laws of physics such as the trading of electricity in a network (Leveque, 2006) and the combinatoric auction used to allocate scarce airport landing and take-off slots (Rassenti et al., 1982).
