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Pollution Permits, Imperfect Competition and Abatement Technologies

Clémence Christin (), Jean-Philippe Nicolai () and Jerome Pouyet
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Jean-Philippe Nicolai: ETH Zurich, Switzerland

No 13/186, CER-ETH Economics working paper series from CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich

Abstract: Under imperfect competition, the effect of a cap-and-trade system on indus- try profits depends on the type of abatement technology that is used by firms: industries that use process-integrated technologies are more affected than those using end-of-pipe abatement technologies. The interaction between environmental policy and the evolution of the market structure is then studied. In particular, a reserve of pollution permits for new entrants is justified when the industry uses a process-integrated abatement technology, while a system with a preemption right may be justified in the case of end-of-pipe abatement technology.

Keywords: Cap-and-trade system; imperfect competition; abatement technologies. (search for similar items in EconPapers)
JEL-codes: L13 Q53 Q58 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-com, nep-ene, nep-env, nep-reg and nep-res
Date: 2013-10
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Persistent link: https://EconPapers.repec.org/RePEc:eth:wpswif:13-186

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