Emissions Trading, Firm Heterogeneity, and Intra-Industry Reallocations in the Long Run

Yoshifumi Konishi and Nori Tarui

No 2014-1, CEI Working Paper Series from Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University

Abstract: Design of environmental regulation has substantial implications for size distribution and mass of firms within and across industries in the long run. In a general equilibrium model that accounts for endogenous entry and exit of heterogeneous firms, the welfare impacts of emissions trading are analytically decomposed into the effects on economy-wide income, mass of firms, size distribution, markups, and factor prices. Distortionary impacts on size distribution and permit price depend on the conditionality of permit distribution, interactions between changes in entry-exit conditions and in aggregate accounting conditions, the factor intensity of entry, and coverage of non-pollution-intensive sectors in emissions trading.

Keywords: Conditional Allocation Rules; Emissions Trading; Heterogeneous Firms; Endogenous; Entry/Exit; Melitz Model; Imperfect Competition (search for similar items in EconPapers)
JEL-codes: Q50 Q52 Q58 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2014-05
New Economics Papers: this item is included in nep-bec, nep-ene, nep-env and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/28323/wp2014-1.pdf

Related works:
Journal Article: Emissions Trading, Firm Heterogeneity, and Intra-industry Reallocations in the Long Run (2015)
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:hit:hitcei:2014-1

Access Statistics for this paper

More papers in CEI Working Paper Series from Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University Contact information at EDIRC.
Bibliographic data for series maintained by Reiko Suzuki (suzukicr@ier.hit-u.ac.jp this e-mail address is bad, please contact repec@repec.org).