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For environmental applications, the usual reference is J. H. Dales.   
 
Tom Tietenberg, one of the current developers of the tradeable permit idea 
for environmental policy, lists at his internet site four citations under 
"HISTORICAL ORIGINS": 
 
Coase, R. (1960). "The Problem of Social Cost." The Journal of Law and 
Economics 3(October): 1-44. 
 
Crocker, T. D. (1966). The Structuring of Atmospheric Pollution Control 
Systems. The Economics of Air Pollution. H. Wolozin. New York, W. W.Norton 
& Co.: 61-86. 
 
Dales, J. H. (1968). "Land, Water and Ownership." Canadian Journal of 
Economics 1: 791-804. 
 
Dales, J. H. (1968). Pollution, Property and Prices. Toronto, University of 
Toronto Press. 
 
Of course, the general idea must go back much further. One, little-known 
discussion of the general idea can be found in A. G. Hart's comment on a 
proposal by Richard Hazelett for the public management of private 
employment in 1957.  As one can see from Hart's discussion, the idea of 
auctioning grazing licenses (essentially identical to the tradeable 
pollution permit idea) was already well-known.  See: 
 
Richard Hazelett, "Public Management of Private Employment Volume: A 
Proposal," American Economic Review, Vol. 47, No. 1. (Mar., 1957), pp. 
136-148. 
 
Albert Gailord Hart, "Public Management of Private Employment Volume: 
Comment," American Economic Review, Vol. 47, No. 1. (Mar., 1957), pp. 
148-152. 
 
There is a reference to transferable quota system in John Jewkes' 1928 book 
review of _Lancashire under the Hammer_ by B. Bowker (Economic Journal, 
Vol. 38, No. 152. (Dec., 1928), pp. 612-615.) 
 
Would it shock anyone if the general idea were to be found in Adam Smith? 
 
Mat Forstater  
 
 
 
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