Background Note | HBS Case Collection | March 1992 (Revised November 1993)

Trading the Right to Pollute: Developing the Market for Pollution Allowances

by Carliss Y. Baldwin

Abstract

Examines the issues underlying the formation of the market for tradeable pollution allowances, following the requirement of Title IV of the 1990 Amendments to the Clean Air Act. Examines the implications that these trade the allowances hold for the U.S. electric utilities industry and the strategic choices these utilities faced in 1992.

Keywords: Strategic Planning; Pollution and Pollutants; Trade; Utilities Industry;

Citation:

Baldwin, Carliss Y. "Trading the Right to Pollute: Developing the Market for Pollution Allowances." Harvard Business School Background Note 292-120, March 1992. (Revised November 1993.)