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The Effects of Emissions Standards on Industry

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  • Farzin, Y H

Abstract

Industrialists often claim that, by rendering firms unprofitable and hence forcing them out of business, stricter emissions standards reduce the industry output and competition. This paper considers situations where firms' pollution reduction increases the industry demand, but, because of inability to coordinate their emissions reductions, and thus free riding problem, they are unable to act in their own collective interest. For such situations, the paper studies the effects of emissions standards on the equilibrium in an oligopoly market. It shows conditions under which a stricter standard leads to a larger number of firms in the industry, a greater industry output, and a lower total pollution in the long run. Copyright 2003 by Kluwer Academic Publishers

Suggested Citation

  • Farzin, Y H, 2003. "The Effects of Emissions Standards on Industry," Journal of Regulatory Economics, Springer, vol. 24(3), pages 315-327, November.
    • Handle: RePEc:kap:regeco:v:24:y:2003:i:3:p:315-27
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    Citations

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    Cited by:

    1. Rinaldo Brau & Carlo Carraro, 2011. "The design of voluntary agreements in oligopolistic markets," Journal of Regulatory Economics, Springer, vol. 39(2), pages 111-142, April.
    2. Farzin, Y. Hossein & Akao, Ken-Ichi, 2006. "Environmental Quality in a Differentiated Duopoly," Economic Theory and Applications Working Papers 12183, Fondazione Eni Enrico Mattei (FEEM).
    3. André, Francisco J., 2015. "Strategic Effects and the Porter Hypothesis," MPRA Paper 62237, University Library of Munich, Germany.
    4. Ping Lin & Yu Pang, 2020. "Command-and-control regulation, incentive for pollution abatement, and market structure," Journal of Regulatory Economics, Springer, vol. 57(2), pages 159-180, April.
    5. Jiunn‐Rong Chiou & Hung‐Yi Chen, 2022. "The Impact of Foreign Ownership on the Choice between Emission Taxes and Emission Standards," The Economic Record, The Economic Society of Australia, vol. 98(323), pages 392-404, December.
    6. Sengupta Aditi, 2010. "Environmental Regulation and Industry Dynamics," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-29, June.
    7. Florian Baumann & Tim Friehe, 2017. "Design standards and technology adoption: welfare effects of increasing environmental fines when the number of firms is endogenous," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 19(2), pages 427-450, April.
    8. Kanjilal, Kiriti & Ahmed, Haseeb, 2021. "Transboundary regulation and management of antibiotics in livestock," 2021 Annual Meeting, August 1-3, Austin, Texas 313889, Agricultural and Applied Economics Association.
    9. Sherzod B. Akhundjanov & Felix Muñoz-García, 2019. "Transboundary Natural Resources, Externalities, and Firm Preferences for Regulation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(1), pages 333-352, May.
    10. Pang, Yu, 2018. "Profitable pollution abatement? A worker productivity perspective," Resource and Energy Economics, Elsevier, vol. 52(C), pages 33-49.
    11. Lahiri, Sajal & Ono, Yoshiyasu, 2015. "Pollution, foreign direct investment, and welfare," Research in Economics, Elsevier, vol. 69(2), pages 238-247.
    12. Lambert Schoonbeek & Frans Vries, 2009. "Environmental taxes and industry monopolization," Journal of Regulatory Economics, Springer, vol. 36(1), pages 94-106, August.
    13. Ana Espínola-Arredondo & Félix Muñoz-García, 2016. "Profit-enhancing environmental policy: uninformed regulation in an entry-deterrence model," Journal of Regulatory Economics, Springer, vol. 50(2), pages 146-163, October.
    14. Krishnan S. Anand & François C. Giraud-Carrier, 2020. "Pollution Regulation of Competitive Markets," Management Science, INFORMS, vol. 66(9), pages 4193-4206, September.
    15. Michaël Aklin & Patrick Bayer & S. Harish & Johannes Urpelainen, 2014. "Who blames corruption for the poor enforcement of environmental laws? Survey evidence from Brazil," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 16(3), pages 241-262, July.
    16. Ino, Hiroaki & Matsumura, Toshihiro, 2021. "Optimality of emission pricing policies based on emission intensity targets under imperfect competition," Energy Economics, Elsevier, vol. 98(C).
    17. Ana Espínola-Arredondo & Félix Muñoz-García, 2012. "When do firms support environmental agreements?," Journal of Regulatory Economics, Springer, vol. 41(3), pages 380-401, June.
    18. Y.H. Farzin & C.A. Bond, 2012. "Unbundling Technology Adoption and tfp at the Firm Level. Do Intangibles Matter?," Working Papers 2012.97, Fondazione Eni Enrico Mattei.
    19. Anthony Heyes, 2009. "Is environmental regulation bad for competition? A survey," Journal of Regulatory Economics, Springer, vol. 36(1), pages 1-28, August.
    20. Farzin, Y. H. & Akao, K. I., 2008. "Environmental Quality in a Differentiated Duopoly Facing a Minimum Quality Standard," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 271509, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    21. Ino, Hiroaki & Matsumura, Toshihiro, 2021. "Promoting green or restricting gray? An analysis of green portfolio standards," Economics Letters, Elsevier, vol. 198(C).
    22. Zhen Zhang & Joshua Hinger & David Audretsch & Guojun Song, 2015. "Environmental technology transfer and emission standards for industry in China," The Journal of Technology Transfer, Springer, vol. 40(5), pages 743-759, October.

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