Economics at your fingertips  

Incentives for Investment in Advanced Pollution Abatement Technology in Emission Permit Markets with Banking

Daniel Phaneuf and Till Requate ()

Environmental & Resource Economics, 2002, vol. 22, issue 3, 369-390

Abstract: We examine the incentives that firms have to invest in cleaner abatementtechnology when the banking of permits is allowed in emission permittrading schemes. We show that under certainty permit banking can distortincentives for investment and lead to a sub-optimal amount of investmentspending. Under imperfect information, aggregate abatement costuncertainty and investment irreversibility provide arguments for allowingbanking. We generalize the model to consider these, showing that somebanking is desirable but that it need not be the case that the privatebanking solution is optimal. Copyright Kluwer Academic Publishers 2002

Keywords: abatement technology investment; emission banking; marketable permits (search for similar items in EconPapers)
Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20) Track citations by RSS feed

Downloads: (external link) (text/html)
Access to full text is restricted to subscribers.

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:

Ordering information: This journal article can be ordered from
http://www.springer. ... al/journal/10640/PS2

Access Statistics for this article

Environmental & Resource Economics is currently edited by Ian J. Bateman

More articles in Environmental & Resource Economics from Springer, European Association of Environmental and Resource Economists Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().

Page updated 2019-07-21
Handle: RePEc:kap:enreec:v:22:y:2002:i:3:p:369-390