Model Example Results The Environmental Business created a model to study how Emissions Trading will evolve. There are a number of firms who are each allowed to produce a certain level of emissions. They make decisions based on simple learning rules, with the aim of maximising profits. Based on these rules, firms may take part in a market for allowances allowing carbon dioxide equivalent emissions. If firms sell these allowances they must produce less emissions and if they buy them they are allowed to produce more emissions. Firms use the simple learning rules to decide buy and sell prices. The model looks at the conditions needed for a market to exist, whether the market settles to an equilibrium (and in simple cases if it is the theoretical equilibrium) and how many trades occur. For more information see the report: Evolution of a Market For Permits. To view some results of this model, click in the relevant "View Graph" box.