SIRCA Breakfast Forums
December 2003
Environmental markets, financial markets, and experimental economics
– some Australian perspectives
SIRCA invites you to a complimentary breakfast forum to discuss:
“Environmental markets, financial markets, and experimental
economics – some Australian perspectives”
By: Mr Karel Nolles, Manager, Environmental Markets – AFMA
& SIRCA PhD Scholar.
Industry Expert Discussant: Mr. Greg Foy, Senior Energy
Trader – Renewables, Energy Australia
| Date |
10th December, 2003 |
| Time |
7.30 for 7.45am start. The Forum will conclude at 8.45am. |
| Where |
Level 2, 9 Castlereagh Street, Sydney.
SIRCA Breakfast Forums are held at our Sydney CBD office with
places deliberately limited to ensure frank and open discussion. |
| RSVP |
Frances Carlow, Business Development Manager
Email: fcarlow@sirca.org.au
Tel: +61 2 9236 9114 |
 Download
Research Paper (PDF, 325KB)
What makes the study interesting?
This briefing will outline the major environmental markets and
developments in Australia, and in particular focus upon the design
and regulatory problems associated with the largest of those markets,
the Mandatory Renewable Energy Target (MRET) market.
Environmental markets have generally been implemented by government
agencies different from those agencies traditionally associated
with the oversight and management of financial (and other) markets.
One result is that lessons from the design and performance of financial
and major commodity markets have not been heeded in the design of
many environmental markets.
In part this is because of the understandable reluctance of government
departments with an environmental focus to become involved in questions
of market regulation, management and surveillance on an ongoing
basis.
Summary of the findings of this research
Karel has just returned to Australia after spending 2 months working
with Vernon Smith’s experimental economics laboratory (ICES)
at George Mason University in Washington DC. During his time with
ICES Karel conducted a number of experiments based on the MRET market,
and the preliminary results tend to suggest that the MRET market
design will have difficulty reaching a stable equilibrium.
The potential result is that the assumptions of efficiency used
to justify implementing environmental policy via a market mechanism
could be violated, with eventual impacts on the willingness of the
public to support using markets to implement such policies.
Who should attend?
Anyone considering being a participant in the Australian environmental
markets, particularly the MRET market either as principal or as
an intermediary will find this presentation valuable.
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