Clean technology adoption and its influence on tradeable emission permit prices
AbstractIn this paper we give an example in which the price of tradeable emission permits increases despite firms' adoption of a less polluting technology. This is in contrast with Montero (2002) and Parry (1998), among others. If two Counot players switch to a cleaner technology, the price for permits may increase due to an increase in the net demand for permits and a decrease in net supply of permits after the clean technology is adopted. This is only the case when output demand is elastic.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2009029.
Date of creation: 01 Apr 2009
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environmental innovation; tradable emission permits; Cournot interaction;
Find related papers by JEL classification:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-03-28 (All new papers)
- NEP-ENE-2010-03-28 (Energy Economics)
- NEP-ENV-2010-03-28 (Environmental Economics)
- NEP-INO-2010-03-28 (Innovation)
- NEP-RES-2010-03-28 (Resource Economics)
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- Alfred Endres & Tim Friehe, 2011.
"The Monopolistic Polluter under Environmental Liability Law: Incentives for Abatement and R&D,"
CESifo Working Paper Series
3649, CESifo Group Munich.
- Alfred Endres & Tim Friehe, 2013. "The monopolistic polluter under environmental liability law: incentives for abatement and R&D," Social Choice and Welfare, Springer, vol. 40(3), pages 753-770, March.
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