Optimal Design of Permit Markets with an Ex Ante Pollution Target, August 2006

In this paper, we examine the design of permit trading programs when the objective is to minimize the cost of achieving an ex ante pollution target, that is, one that is defined in expectation rather than an ex post deterministic value. We consider two potential sources of uncertainty, the presence of either of which can make our model appropriate: incomplete information on abatement costs and uncertain delivery coefficients. In such a setting, we find three distinct features that depart from the well-established results on permit trading: (1) the regulator’s information on firms’ abatement costs can matter; (2) the optimal permit cap is not necessarily equal to the ex ante pollution target; and (3) the optimal trading ratio is not necessarily equal to the delivery coefficient even when it is known with certainty. Intuitively, since the regulator is only required to meet a pollution target on average, she can set the trading ratio and total permit cap such that there will be more pollution when abatement costs are high and less pollution when abatement costs are low. Information on firms’ abatement costs is important in order for the regulator to induce the optimal alignment between pollution level and abatement costs.

Optimization of Soil Stabilization with Class C Fly Ash, January 1987

Previous Iowa DOT sponsored research has shown that some Class C fly ashes are ementitious (because calcium is combined as calcium aluminates) while other Class C ashes containing similar amounts of elemental calcium are not (1). Fly ashes from modern power plants in Iowa contain significant amounts of calcium in their glassy phases, regardless of their cementitious properties. The present research was based on these findings and on the hyphothesis that: attack of the amorphous phase of high calcium fly ash could be initiated with trace additives, thus making calcium available for formation of useful calcium-silicate cements. Phase I research was devoted to finding potential additives through a screening process; the likely chemicals were tested with fly ashes representative of the cementitious and non-cementitious ashes available in the state. Ammonium phosphate, a fertilizer, was found to produce 3,600 psi cement with cementitious Neal #4 fly ash; this strength is roughly equivalent to that of portland cement, but at about one-third the cost. Neal #2 fly ash, a slightly cementitious Class C, was found to respond best with ammonium nitrate; through the additive, a near-zero strength material was transformed into a 1,200 psi cement. The second research phase was directed to optimimizing trace additive concentrations, defining the behavior of the resulting cements, evaluating more comprehensively the fly ashes available in Iowa, and explaining the cement formation mechanisms of the most promising trace additives. X-ray diffraction data demonstrate that both amorphous and crystalline hydrates of chemically enhanced fly ash differ from those of unaltered fly ash hydrates. Calciumaluminum- silicate hydrates were formed, rather than the expected (and hypothesized) calcium-silicate hydrates. These new reaction products explain the observed strength enhancement. The final phase concentrated on laboratory application of the chemically-enhanced fly ash cements to road base stabilization. Emphasis was placed on use of marginal aggregates, such as limestone crusher fines and unprocessed blow sand. The nature of the chemically modified fly ash cements led to an evaluation of fine grained soil stabilization where a wide range of materials, defined by plasticity index, could be stabilized. Parameters used for evaluation included strength, compaction requirements, set time, and frost resistance.

An Estimate of the Cost to Resurface Pavements and Bridges Damaged by Studded Tires, 1972

This report contains an estimate of the cost of highway resurfacing necessitated by damage from studded tires. The total is $95,620,000 for the twenty-five years from 1971 to 1996. This total includes $51,937,000 to resurface pavements and bridges on Interstate routes and $43,683,000 for other Primary highways. The estimate for Interstate routes includes those sections now open to traffic and those planned for completion by November 1974. The estimate for other Primary routes includes rural and municipal sections open to traffic as of November 1970. The estimate was prepared by computing the cost of expected pavement and bridge resurfacing costs for the twenty-five year period assuming continued use of studded tires, then subtracting from this the expected resurfacing ) cost for the same period assuming that the use of' studded tires is prohibited. The total figure, $95,620,000, should be regarded as a conservative estimate of the cost which may be avoided by prohibiting the use of studded tires in Iowa. The conservative nature of the estimate may be demonstrated by the following examples of the guidelines used iri its preparation. 1. Only mainline pavements were included in the cost estimate for the Interstate routes. The connecting loops, exit ramps and entrance ramps at Interstate interchanges contain many additional miles of pavement subject to wear by studded tires. This pavement was omitted from the estimate because reliable ' information about the rate of pavement wear at such locations is not available. As a result, the Interstate resurfacing costs are underestimated. 2. Several other costs were also omitted from the estimate because of a lack of sufficient information. These include the cost of repairing damage caused by studded tires to city streets other than those designated as Primary routes, the damage to pavements and bridges on the more-heavily travelled Secondary roads, and the damage to pavement traffic markings on all highway systems. Experience indicates that portland cement concrete pavements in Iowa have a normal service life of twenty-five years before resurfacing becomes necessary. The service life for asphalt pavements is thirteen years. In making this cost estimate, the need for resurfacing was attributed to wear from studded tires only when the normal service life of the pavement was shortened by that wear. Consequently, this cost estimate does not account for the reduced safety and convenience to Iowa motorists during the time when pavement wear caused by studded tires is significant but less than the critical amount.