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Emission trading and labor market rigidity inan international duopoly model

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  • Tarik Tazdaït

    (CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique)

  • Alejandro Caparros

    (IPP - Institute for Public Goods and Policies - CSIC - Consejo Superior de Investigaciones Cientificas [España] = Spanish National Research Council [Spain])

  • Jean-Chrsitophe Péreau

    (OEP - Organisation, Efficacité, Production - CNRS - Centre National de la Recherche Scientifique)

Abstract

Emission trading systems have been recently proposed in diffrerent regions to reduce polluting emissions (e.g. in the European Union for carbon dioxide). One of the objectives of these systems is to encourage firms to adopt advanced abatement technologies. However permits create an incentive to reduce production, which may be seen as negative by policy makers. Combining the emission trading systemwith a more rigid labour market, we show conditions under which it is possible to avoid this impact keeping the incentives to improve abatement technologies. The analysis is done for oligopolistic firms engagedin international rivalry.

Suggested Citation

  • Tarik Tazdaït & Alejandro Caparros & Jean-Chrsitophe Péreau, 2007. "Emission trading and labor market rigidity inan international duopoly model," CIRED Working Papers halshs-00271222, HAL.
    • Handle: RePEc:hal:ciredw:halshs-00271222
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00271222v1
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