 Tax versus regulations: Polluters’ incentives for loosening industry emission targetsKosuke Hirose, Akifumi Ishihara and Toshihiro Matsumura Energy Economics, 2024, vol. 136, issue C Abstract: We investigate the political incentives of a polluter in affecting industry emission targets (relaxing emission restrictions) imposed by the government in a monopoly market. Specifically, we compare three typical environmental policies—two command-and-control regulations (an emission cap regulation that restricts total emissions and an emission intensity regulation that restricts emissions per output unit), and an emission tax. We presume a policy to be most robust when a less strict emission target (i.e., an increase in the targeted emission level) imposed by the government on the industry increases the firm’s profit least significantly among the three policies. This is because the firm has the least incentives for affecting emission targets. We find that the emission tax is the most robust if the government aims for a net-zero emission society. However, the emission tax is the least robust if the emission target is not ambitious or the government has weak resolve against political pressures from polluters. Keywords: Net-zero emission industry; Emission cap; Emission intensity; Emission tax; Emission equivalence; Profit ranking (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:136:y:2024:i:c:s0140988324004134 DOI: 10.1016/j.eneco.2024.107705 Access Statistics for this article Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant More articles in Energy Economics from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.