A Simulation for Tradable Pollution Permits

At Easter 2005 I attended the EBEA Conference in Manchester. In setting work for my students during
my absence, I asked my two G&T students to plan to deliver a lesson on my return on tradable permits.
I gave no specific instructions, and I expected them to come up with a presentation of some sort.
Instead, they came up with a simulation. For one 1 hr lesson pw I was timetabled in a Science lab due
to the usual rooming constraints. This, I thought, was a major pain. The two students turned this
weakness to their advantage. They negotiated with the Science staff the following simulation.
The class (12 or so) was split into group of three. Each group was given a starting capital sum of
money. They used this to buy small flasks of saline solution as a raw material, and a selection of
equipment (primarily a Bunsen burner) as capital equipment. The burner drove off the water leaving a
flask with a little salt at the bottom. This could be sold back to the central authority. Groups could
buy more or fewer burners as they wished, although the starting capital was such that buying a second
burner was quite a big deal.
Groups had ten minutes or so to get the hang of all this. Then, it was announced that each burner
would need a tradable permit to operate. There were enough permits for one per group plus a few left
over (but not many). Groups bought these by sealed bid from the central authority, and were free to
trade them between themselves thereafter.
Then, they were more or less left to it, and all I had to do was to nip in the bid some cheating. The aim,
as usual, was to maximise profits. Some time had to be allowed for clearing up properly. And then we
could discuss and debrief the exercise.
There was no deep learning on the sense that the simulation did not throw up any results other than the
obvious text book stuff. But there were benefits. Firstly, it was fun; the students enjoyed themselves
and the time passed very quickly, which cant always be said last thing on a Wednesday. Secondly, all
the students, including the academically weaker students got the point. Thirdly, and perhaps most
importantly, they remembered it.
Richard Bowett