Environmental policy and endogenous market structure
Barbara Annicchiarico (),
Luca Correani () and
Fabio Di Dio ()
Resource and Energy Economics, 2018, vol. 52, issue C, 186-215
This paper presents a simple dynamic general equilibrium model with supply-side strategic interactions to study the economic effects of mitigating greenhouse gas emissions in an economy with an emission cap and oligopolistic firms competing on prices. With such endogenous market structure a gradual decarbonization policy is likely to induce higher markups, while the number of active firms displays a U-shaped behavior, first decreasing and then increasing. In the long run more firms are active, but they transfer a part of the compliance cost to households by charging a higher markup. The negative effects on the level of economic activity of this anti-competitive outcome are strongly mitigated by recycling policies.
Keywords: E60; Q54; Q58; Environmental policy; Dynamic general equilibrium model; Endogenous market structure (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
Working Paper: Environmental Policy and Endogenous Market Structure (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:resene:v:52:y:2018:i:c:p:186-215
Access Statistics for this article
Resource and Energy Economics is currently edited by J. F. Shogren and S. Smulders
More articles in Resource and Energy Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().