EconPapers    
Economics at your fingertips  
 

Climate change policy and its effect on market power in the gas market

David M Newbery ()

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: The European Emissions Trading Scheme (ETS) limits CO2 emissions from covered sectors, especially electricity until December 2007, after which a new set of Allowances will be issued. The paper demonstrates that the impact of controlling the quantity rather than the price of carbon is to reduce the elasticity of demand for gas, amplifying the market power of gas suppliers, and also amplifying the impact of gas price increases on the price of electricity. A rough estimate using just British data suggests that this could increase gas market power by 50%.

Keywords: Climate change; emissions trading; market power; gas; quotas vs taxes (search for similar items in EconPapers)
JEL-codes: Q54 Q58 L94 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ene and nep-env
Date: 2006-02
Note: IO
References: Add references at CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://www.electricitypolicy.org.uk/pubs/wp/eprg0510.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to www.electricitypolicy.org.uk:80

Related works:
Journal Article: Climate Change Policy and Its Effect on Market Power in the Gas Market (2008) Downloads
Working Paper: Climate Change Policy and its Effect on Market Power in the Gas Market (2006) Downloads
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:cam:camdae:0606

Access Statistics for this paper

More papers in Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge
Bibliographic data for series maintained by Jake Dyer ().

 
Page updated 2019-09-20
Handle: RePEc:cam:camdae:0606