Noncooperative oligopoly behavior in nonrenewable resource markets is analyzed under stationary conditions assuming perfect information. The existence of Cournot-Nash equilibria in output paths is established under standard cost and demand assumptions, and a number of comparative dynamic results are obtained. If all suppliers have the same costs, for instance, and total reserves are fixed, either increasing the number of suppliers or equalizing their reserve holdings causes more rapid resource use. If suppliers' costs differ, it is shown that equilibrium involves inefficient production; high-cost reserves may even be exhausted before low-cost reserves.

Continuing rapid growth in U.S. gasoline consumption threatens to exacerbate environmental and congestion problems. We use flexible semiparametric and nonparametric methods to guide analysis of household gasoline consumption, and including this variable cuts the estimated income elasticity in half. Slower projected future growth in licensed drivers points to slower growth in gasoline consumption. A parsimonious representation of age, income, lifecycle and location effects is developed and tested. We show how flexible methods also helped reveal fundamental problems with the available price data.

The 1990 Clean Air Act Amendments initiated the first large-scale use of the tradable permit approach to pollution control. The theoretical case for this approach rests on the assumption of an efficient market for emission rights. The authors' empirical analysis shows that the emission rights market created by the 1990 Amendments had become reasonably efficient by mid-1994. They also show that the auctions specified in the Amendments to jump-start trading had become a small part of the overall market. Finally, the authors demonstrate that the strategic bidding behavior discussed in the literature has had no effect on market prices.

Emissions of carbon dioxide from the combustion of fossil fuels, which may contribute to long-term climate change, are projected through 2050 using reduced-form models estimated with national-level panel data for the period of 1950–1990. Using the same set of income and population growth assumptions as the Intergovernmental Panel on Climate Change (IPCC), we find that the IPCC's widely used emissions growth projections exhibit significant and substantial departures from the implications of historical experience. Our model employs a flexible form for income effects, along with fixed time and country effects, and we handle forecast uncertainty explicitly. We find clear evidence of an “inverse U” relation with a within-sample peak between carbon dioxide emissions (and energy use) per capita and per-capita income.

The 1990 Clean Air Act Amendments initiated the first large-scale use of the tradable permit approach to pollution control. The theoretical case for this approach rests on the assumption of an efficient market for emission rights. Our empirical analysis shows that the emission rights market created by the 1990 Amendments had become reasonably efficient by mid-1994. We also show that the auctions specified in the Amendments to jump-start trading had become a small part of the overall market. Finally, we demonstrate that the strategic bidding behavior discussed in the literature has had no effect on market prices.