Environmental Policy under Ambiguity
The 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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- Cameron Hepburn & John Quah & Robert Ritz, 2006. "Emissions Trading and Profit-Neutral Grandfathering," Economics Series Working Papers 295, University of Oxford, Department of Economics.
- Gilboa, Itzhak & Schmeidler, David, 1989. "Maxmin expected utility with non-unique prior," Journal of Mathematical Economics, Elsevier, vol. 18(2), pages 141-153, April.
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- Fischer, Carolyn, 2003. "Output-Based Allocation of Environmental Policy Revenues and Imperfect Competition," Discussion Papers dp-02-60, Resources For the Future. Full references (including those not matched with items on IDEAS)
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