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I would suggest that the best source on tradeable pollution permits would 
be various writings of Tom Tietenberg.  However, the first such system in 
the world ever to be set up was in the state of Wisconsin in the late 
1970s.  It was for BOD emissions from pulp and paper mills on the Fox 
River.  My understanding is that only one transaction ever arose out of 
that system, which could be viewed more as being pro forma rather than very 
effective.  I believe that Tietenberg discusses this somewhere, and I know 
he is well aware of it and this fact.  I personally played a role in 
setting it up, and Tom was a grad student at U. of Wisconsin shortly before 
this and knew the main people involved in it. 
      It is also my understanding from an interview with Richard Norgaard that starting in
the late 1950s an informal system of tradeable permits arose in Los Angeles regarding
"sunshine rights" for buildings.  I know of no existing published source for this latter
matter, although the interview with Norgaard will appear this fall in  _The Changing Face
of Economics: Interviews with Cutting Edge Economists_ by David Colander, Richard Holt,
and Barkley Rosser (me), a book forthcoming from the University of Michigan Press.
 
Barkley Rosser 
 
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