Cross-Industry Emission Permits Trading
AbstractThe present paper examines the effectiveness of emission permits trading across industries. We find that, while permits trading in a competitive environment minimizes costs of compliance, it also enhances product market imperfections. We also find that a standard-setting regulation yields superior welfare results if policy makers have able information. Standard setting allows policy makers the flexibility of taking into account the existing imperfections in each industry. Although not surprising, this result has important policy implications in situations in which policy makers consider establishing permits trading between publicly owned dominant polluters and other industrial polluters. Since policy makers have able information on publicly-owned firms, it might be welfare improving to directly control emissions of the dominant publicly-owned polluters. Given that many of the major polluters in the real world are large firms in heavily concentrated industries many of which are also regulated, our result warrants policy makers' attention. Copyright 1998 by Kluwer Academic Publishers
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Bibliographic InfoArticle provided by Springer in its journal Journal of Regulatory Economics.
Volume (Year): 13 (1998)
Issue (Month): 1 (January)
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Web page: http://www.springerlink.com/link.asp?id=100298
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- Guy MEUNIER, 2011.
"Emission permit trading between imperfectly competitive product markets,"
40770, Institut National de la Recherche Agronomique, France.
- Guy Meunier, 2011. "Emission Permit Trading Between Imperfectly Competitive Product Markets," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 50(3), pages 347-364, November.
- Sang-Ho Lee & Sang-Ha Park, 2005. "Tradable Emission Permits Regulations: The Role of Product Differentiation," International Journal of Business and Economics, College of Business, and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 4(3), pages 249-261, December.
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