To Abate, or Not to Abate? The Arising of the Win–Win Solution Under Time Consistent Emission Taxation

Elettra Agliardi and Luca Lambertini ()
Additional contact information
Luca Lambertini: University of Bologna

Environmental & Resource Economics, 2024, vol. 87, issue 6, No 3, 1389-1405

Abstract: Abstract We analyse a model of environmental regulation where two firms can optimally decide to invest in an emission abatement technology and the regulator taxes firms’ emissions in a time-consistent manner. Depending on the values of the parameters measuring the extent of emission abatement that firms may achieve and the degree of product differentiation, we characterize the subgame perfect equilibria, developing all admissible scenarios where either both firms invest in abatement technologies, none of them do, or just one does, and show the conditions under which a win-win solution emerges, validating a strong form of Porter hypothesis. We also extend the main result to the oligopoly game with a generic number of firms.

Keywords: Abatement technologies; Cournot competition; Porter hypothesis (search for similar items in EconPapers)
JEL-codes: L13 L51 Q50 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10640-024-00879-6 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:87:y:2024:i:6:d:10.1007_s10640-024-00879-6

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

DOI: 10.1007/s10640-024-00879-6

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 () and Springer Nature Abstracting and Indexing ().