Pollution Permits, Imperfect Competition and Abatement Technologies
AbstractUnder imperfect competition, the effect of a cap-and-trade system on indus- try profits depends on the type of abatement technology that is used by firms: industries that use process-integrated technologies are more affected than those using end-of-pipe abatement technologies. The interaction between environmental policy and the evolution of the market structure is then studied. In particular, a reserve of pollution permits for new entrants is justified when the industry uses a process-integrated abatement technology, while a system with a preemption right may be justified in the case of end-of-pipe abatement technology.
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Bibliographic InfoPaper provided by CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich in its series CER-ETH Economics working paper series with number 13/186.
Length: 48 pages
Date of creation: Oct 2013
Date of revision:
Cap-and-trade system; imperfect competition; abatement technologies.;
Find related papers by JEL classification:
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
This paper has been announced in the following NEP Reports:
- NEP-AGR-2013-12-06 (Agricultural Economics)
- NEP-ALL-2013-12-06 (All new papers)
- NEP-COM-2013-12-06 (Industrial Competition)
- NEP-ENE-2013-12-06 (Energy Economics)
- NEP-ENV-2013-12-06 (Environmental Economics)
- NEP-REG-2013-12-06 (Regulation)
- NEP-RES-2013-12-06 (Resource Economics)
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