Tax induced emissions? Estimating short-run emission impacts from carbon taxation under different market structures

Gordon Leslie

Journal of Public Economics, 2018, vol. 167, issue C, 220-239

Abstract: This article finds that the introduction of a carbon tax increased short-run carbon emissions in an imperfectly competitive wholesale electricity market. The unique feature of the Western Australian setting is that the same carbon tax was introduced and later repealed, but the market structure differed at each event. At the repeal event, the dominant firm had less incentive to exercise unilateral market power. Then, the opposite result is observed — emissions were lower with the tax. I show how the short-run impact of pollution taxation in imperfect markets depends on production technologies, market structure and the size of the tax.

Keywords: Environmental taxes and subsidies; Oligopoly and other imperfect markets; Firm organization and market structure; Electric utilities; Energy and environmental policy (search for similar items in EconPapers)
JEL-codes: H23 L13 L22 L94 L98 Q58 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0047272718301786
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:167:y:2018:i:c:p:220-239

DOI: 10.1016/j.jpubeco.2018.09.010

Access Statistics for this article

Journal of Public Economics is currently edited by R. Boadway and J. Poterba

More articles in Journal of Public Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().