IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-03084174.html
   My bibliography  Save this paper

Emission Reduction and Profit-Neutral Permit Allocations

Author

Listed:
  • Jean-Philippe Nicolaï

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

Abstract

The present paper addresses two policy objectives: to implement a market for pollution permits and to make regulation acceptable for businesses. Profit-neutral permit allocations are defined as the number of permits that the regulator should give for free so that post-regulation profits (i.e. a firm's profits in the products market plus the value of the allowances granted for free) are equal to pre-regulation profits. The proposed model is developed by assuming that firms use polluting technologies and compete "a la Cournot". The paper demonstrates that a low number of free allowances is sufficient to meet these two goals. Moreover, the regulator can fully offset losses, even when the reduction in emissions is high, provided that the sectors concerned are not monopolies, both for isoelastic and linear demand functions

Suggested Citation

  • Jean-Philippe Nicolaï, 2019. "Emission Reduction and Profit-Neutral Permit Allocations," Post-Print hal-03084174, HAL.
    • Handle: RePEc:hal:journl:hal-03084174
    DOI: 10.1016/j.jeem.2018.12.001
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-03084174. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.