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Technological choice under environmentalists’ participation in Emissions Trading Systems

  • Elias Asproudis
  • Maria José Gil-Moltó

    ()

We model competition in an emissions trading system (ETS) as a game between two firms and environmental group. In a previous stage, firms endogenously choose their manufacturing technologies. Our results show that there is an inverted U-shape relationship between how polluting the chosen technology is and the degree of the environmentalists' impure altruism. Firms choose a less polluting technology in the presence of the environmentalists than in their absence only if they are characterised by intermediate degrees of impure altruism.

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File URL: http://www.le.ac.uk/economics/research/repec/lec/leecon/dp09-9.pdf
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Paper provided by Department of Economics, University of Leicester in its series Discussion Papers in Economics with number 09/9.

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Date of creation: Apr 2009
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Handle: RePEc:lec:leecon:09/9
Contact details of provider: Postal: Department of Economics University of Leicester, University Road. Leicester. LE1 7RH. UK
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  1. Christoph Böhringer & Ulf Moslener & Bodo Sturm, 2007. "Hot air for sale: a quantitative assessment of Russia’s near-term climate policy options," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 38(4), pages 545-572, December.
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