Package for Transferable Discharge Permits Game

The objective of the game is to simulate a trading regime to exchange rights to some currently unpriced (or underpriced) environmental or natural resource, and illustrate how trading may lead to an efficient level of pollution (or whatever the good is).   A number of scenarios can be tried to illustrate additional points such as the role of imperfect competition in the form of few traders, what happens when conditions change for a firm, what happens when a new firm enters, and so on. The number of scenarios attempted will depend on the time allotted, group involved, what principles you want to illustrate. In the case below, the rights are to emit a physical quantity of pollution.  The game could readily be adapted to trading any other sort of right, such as water rights.  No matter what happens in the actual game, the participants should come away with a very practical sense of how these sorts of markets might work (and not work well).

 

 

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Economy and Environment Program for Southeast Asia