EconPapers    
Economics at your fingertips  
 

Windfall Profits Under Pollution Permits and Output-Based Allocation

Jean-Philippe Nicolaï () and Jorge Zamorano ()
Additional contact information
Jean-Philippe Nicolaï: ETH Zurich
Jorge Zamorano: Université Paris I Panthéon Sorbonne

Environmental & Resource Economics, 2018, vol. 69, issue 4, 661-691

Abstract: Abstract This paper analyzes the implementation of pollution permits. It focuses on the distributional impacts linked with the stringency of output-based allocation when two sectors are covered by the market for permits and the total cap is held constant. A new type of profit increase in sectors that are not exposed to international competition, when energy-intensive trade-exposed (EITE) sectors are granted output-based allocations, is demonstrated theoretically. The paper also illustrates a profit increase in the electricity sector in a possible fourth phase of the European Union Emission Trading Scheme, in which output-based allocation will be granted to EITE sectors, compared with the case in which all permits are auctioned.

Keywords: Tradable permits; Oligopoly markets; Output-based allocation; European Union Emission Trading Scheme (EU ETS) (search for similar items in EconPapers)
JEL-codes: F18 H2 Q5 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s10640-016-0096-1 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:kap:enreec:v:69:y:2018:i:4:d:10.1007_s10640-016-0096-1

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 2018-04-28
Handle: RePEc:kap:enreec:v:69:y:2018:i:4:d:10.1007_s10640-016-0096-1