Emission permit trading with a self-interested regulator

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Palokangas , T K 2019 , ' Emission permit trading with a self-interested regulator ' , Environmental Economics and Policy Studies , vol. 21 , no. 3 , pp. 413–426 . https://doi.org/10.1007/s10018-019-00236-8

Title: Emission permit trading with a self-interested regulator
Author: Palokangas, Tapio Kalervo
Contributor organization: HECER
Helsinki Center of Economic Research (HECER)
Date: 2019-07
Language: eng
Number of pages: 14
Belongs to series: Environmental Economics and Policy Studies
ISSN: 1432-847X
DOI: https://doi.org/10.1007/s10018-019-00236-8
URI: http://hdl.handle.net/10138/305014
Abstract: I examine the welfare effects of emission permit trading in an economy where the use of energy in production generates welfare-harming emissions, there is a regulator that sets industry-specific emission permits and the industries influence the regulator by paying political contributions. I show that policy with nontraded emission permits establishes aggregate production efficiency. Emission permit trading hampers efficiency and welfare by increasing the use of emitting inputs in dirty and decreasing that in clean industries.
Subject: 1172 Environmental sciences
511 Economics
Emission caps
Emission permit trading
Command-and-control instruments
Common agency games
Peer reviewed: Yes
Rights: cc_by
Usage restriction: openAccess
Self-archived version: publishedVersion

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