Informational efficiency of the US SO2 permit market

Abstract: We test the information efficiency of the market for SO2 permits in the US. In order to do so, we analyse the price process of these permits using techniques that have been widely used in financial economics. The evidence presented in this paper suggests that this market is efficient from an informational point of view. Although one could question this hypothesis from a statistical point of view, economic significance suggests that this market is indeed efficient. [Copyright &y& Elsevier]