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Nutrient pollution represents one of the costliest and most challenging threats to water quality in the United States and is a major problem elsewhere in the world. Water quality trading is drawing significant interest from policy makers as a mechanism to manage nutrient loads cost-effectively. Overlooked in nutrient markets developed to date and in standard guidance for market design are the fundamental dynamics of nutrient pollution delivery processes. This paper develops rules to efficiently manage pollution trading between sources that differ in terms of how fast their pollution arrives at degraded waters. We develop a system of optimal time-varying discharge permits and lag trade ratios, as well as a simpler, second-best system of time-invariant permits and trade ratios that achieve optimal pollution loads in the long run steady state. Our second-best system accounts for lags in a way that is both pragmatic and grounded in economic theory. Results from a numerical simulation indicate that the total costs of the second-best system are within 0.2% of the first-best optimum, suggesting that the efficiency loss associated with the second-best design may therefore be of little practical concern. [ABSTRACT FROM AUTHOR]

The present paper reviews the green hydrogen uptake policies in the United States and the European Union. While the EU has a rather broad public support strategy that envisages the entire hydrogen value chain, the U.S. policies are more focused on hydrogen research hubs and subsidies having electric vehicle applications. From the experience of the solar and wind power rollout of the past three decades, we know that the subsidization schemes of the end product play an important role in the transition to renewables. These kinds of subsidization schemes are still lacking for clean hydrogen both in the EU and the U.S. This paper provides a brief overview of selected subsidization schemes from other renewables markets, which are then applied to define an exemplary subsidization path to empower large-scale growth in a market for green hydrogen. Here is proposed a long-term subsidization scheme – deemed as an adequate strategy for the expansion of clean hydrogen in an electricity mix. The suggested exemplary subsidization path recommends shifting from feed-in tariffs to direct marketing with market premiums once a certain threshold is reached, while both can be flanked by the issuance of a Guarantee of Origin for green hydrogen so that there is one market for hydrogen and another market for the certificates. • -A long-term subsidization scheme for the rollout of green hydrogen in the electricity mixes is proposed. • -An exemplary subsidization path to empower large-scale growth in a market for green hydrogen is drafted. • -U.S. and EU are used as case studies to capture lessons for subsidization of green hydrogen economy uptake. • -The U.S. has more centralized green hydrogen rollout policies, whereas the EU has a wider policy toolkit. • -Shifting from FIT to direct marketing with market premiums is key once a certain pre-defined threshold is reached. [ABSTRACT FROM AUTHOR]

We conduct a series of experiments to examine the effects of the make and take fee structure currently used by equity exchanges in the U.S. We examine the effects of these fees on measures of market quality (efficiency, book depth, and the bid-ask spread). We find spreads to be smaller in the presence of make and take fees, and we note that this fee structure seems to induce buyers (moreso than sellers) to compete for rebates from the exchange leading to higher prices and lower profits. To test whether our results are due to the make and take fee structure or are artefacts of trading fees in general, we performed a second set of experiments in which traders on both sides of a transaction were assessed an identical fee. These identical trading fees do not appear to significantly affect our market quality measures. [ABSTRACT FROM AUTHOR]

FERC Order 755 requires each RTO/ISO to use market-based mechanisms to select and compensate frequency regulation resources based on a two-part payment methodology, i.e., a capacity payment to keep the capacity in reserve and a performance payment to reflect the amount of work each resource performs in real-time in response to the system operator's dispatch signal. This paper discusses how MISO enhanced its market rules to implement a market-based regulation performance payment. The market enhancement includes four key areas: quantifying the movement of regulation, modifications to the market clearing processes, performance accuracy measurement, and performance-based two-part regulation compensation. [ABSTRACT FROM PUBLISHER]

Risk and reliability dominate water supply discussions in the arid western United States due to increasing demand and finite, weather-dependent supply. Water markets have evolved in this region so agencies could meet this growing demand. In a few instances, water agencies turned to contractual mechanisms such as options to manage supply. As demand continues to grow option markets and other novel approaches to allocating water may become increasingly popular. We utilize experimental economics to analyze the effect of annual options on water markets in the absence of sufficient real-world data for conventional econometric analysis. We find gains from trade are higher when options can be traded. Additionally, gains are more evenly distributed, particularly with a dominant buyer and many sellers. Findings suggest option markets may be a viable choice as policymakers prepare for future droughts. [ABSTRACT FROM AUTHOR]

Abstract: Most graduating medical students in the United States obtain hospital residencies through the National Resident Matching Program (“NRMP”). The NRMP, or “Match” as it is called, is a centralized procedure that begins each year with hospitals defining residency positions, including a fixed specification of the associated salaries. The Match has been criticized on the grounds that this salary inflexibility biases salaries downward and possibly interferes with efficient allocation of students to positions. This paper proposes a centralized procedure, called the “Flexible-Salary Match,” which makes salaries fully flexible and may help to overcome those problems. [Copyright &y& Elsevier]

The design of spot markets for generation services, such as energy, regulation, and operating reserves, and longer term markets for capacity, remain in evolution in many countries. Market design includes definition of the service, bid, or offer requirements, and rules for pricing and financial settlement. In the United States, most organized regional markets have converged on similar elements of spot market design. The design of capacity markets remains influx. Market power mitigation is currently a regulatory requirement in the United States, and experience with different methods shows that it must be carefully aligned with market design to ensure both efficient pricing and efficient investment. This paper surveys these topics and their relationships to each other and identifies researchable issues. [ABSTRACT FROM AUTHOR]

We examine the impact of wholesale markets on operations of the bulk power system and elaborate some basic implications of engineering practices for designs of wholesale markets. This analysis is intended to provide a basis for enhancements to existing principles of engineering management. Wholesale markets bring economic and financial aspects that alter the context in which system operations are conducted, and introduce incentive and benefit--cost considerations that might alter operating procedures that previously were based on reliability considerations. The principles addressed are those relevant to the interface between engineering aspects of system operations, and economic aspects of market operations. We outline ways that engineering practices developed in the era of vertically integrated utilities might be adapted to the wholesale markets introduced since restructuring began in 1998 in the United States [ABSTRACT FROM AUTHOR]

Economists have lately been called upon not only to analyze markets, but to design them. Market design involves a responsibility for detail, a need to deal with all of a market's complications, not just its principle features. Designers therefore cannot work only with the simple conceptual models used for theoretical insights into the general working of markets. Instead, market design calls for an engineering approach. Drawing primarily on the design of the entry level labor market for American doctors (the National Resident Matching Program), and of the auctions of radio spectrum conducted by the Federal Communications Commission, this paper makes, the case that experimental and computational economics are natural complements to game theory in the work of design. The paper also argues that some of the challenges facing both markets involve dealing with related kinds of complementarities, and that this suggests an agenda for future theoretical research. [ABSTRACT FROM AUTHOR]