Market Power in a System of Tradeable CO2, Quotas

Hege Westskog

The Energy Journal, 1996, vol. 17, issue 3, 85-103

Abstract: This paper examines the connection between market power and the size of efficiency loss in a market for tradeable CO2 permits. Countries, not firms, are the players in the market. A situation is analyzed where some of the, participants have market power, i.e., they can influence the price of a CO2 quota. Each country with market power decides how many quotas to buy or sell, given the other market power countries' sales or purchases of quotas, and the behavior of countries without market power. The latter countries act as price takers. The market equilibrium is compared to a cost effective market situation in order to quantify the efficiency loss resulting from market power.

Keywords: Carbon Dioxide emissions; climate policy CO2 quotas; market power; Cournot; tradable carbon permits (search for similar items in EconPapers)
Date: 1996
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:enejou:v:17:y:1996:i:3:p:85-103

DOI: 10.5547/ISSN0195-6574-EJ-Vol17-No3-6

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