In addition to Prof. Borenstein, the study’s authors are Prof. James Bushnell at UC Davis, Prof. Frank A. Wolak at Stanford University and Matthew Zaragoza-Watkins, a doctoral candidate at UC Berkeley. Profs. Borenstein, Bushnell and Wolak are members of the Market Simulation Group that advised the Air Resources Board. There is a small, but significant, risk that manipulation could occur if large emitting entities were to buy and hoard excess permits in hopes of inflating the price and then selling, the new report says. To minimize risks price spikes and manipulation, the Air Resources Board must ensure that it has a large enough reserve of permits for release whenever the price hits the ceiling, the report says. It should also allow emitters to pay a fee to be able to transfer permits intended for use in later compliance periods to earlier ones. These measures would add up to “an unambiguous policy that credibly limits the maximum allowance price,” the report says. Such a policy “is important to market stability and a strong deterrent to attempts at market manipulation.” The Energy Institute at Haas, a part of UC Berkeley’s Haas School of Business, unites research and curricular programs on energy business, policy, and technology commercialization. It aims to bridge the gap between the frontiers of economic and scientific energy research and the marketplace.