Environmental Policy under Ambiguity
AbstractThe aim of this paper is to extend existing literature on carbon allowance allocation, investigating the impact of uncertainty and ambiguity, due to the lack of future Environmental policy, on the total production in the market. Specifically, we show that an increase in uncertainty has no effect on the total output, whereas an increase in ambiguity leads to a decrease in the total output. An output-based allocation model in Cournot Oligopoly will be used. We will adopt the National Allocation Plan (NAP) of UK for the Second Phase (2005-07) as a case study.
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Bibliographic InfoPaper provided by Queen Mary, University of London, School of Economics and Finance in its series Working Papers with number 638.
Date of creation: Mar 2009
Date of revision:
Carbon allowances; Permits allocation; EU ETS; Uncertainty;
Find related papers by JEL classification:
- D2 - Microeconomics - - Production and Organizations
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
- Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-03-14 (All new papers)
- NEP-ENE-2009-03-14 (Energy Economics)
- NEP-ENV-2009-03-14 (Environmental Economics)
- NEP-RES-2009-03-14 (Resource Economics)
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