Emission permit trading with a self-interested regulator
Tóm tắt
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.
Tài liệu tham khảo
Aidt TS (1998) Political internalization of economic externalities and environmental policy. J Publc Econ 69:1–16
Binder S, Neumayer E (2005) Environmental pressure group strength and air pollution: an empirical analysis. Ecol Econ 55:527–538
Caplan AJ, Silva ECD (2005) An efficient mechanism to control correlated externalities: redistributive transfers and the coexistence of regional and total emissions permit markets. J Environ Econ Manag 49:68–82
Dixit A, Grossman GM, Helpman E (1997) Common agency and coordination: general theory and application to management policy making. J Polit Econ 105:752–769
Finkelstain I, Kislev Y (1997) Prices versus quantities: the political perspective. J Polit Econ 105:83–100
Fredriksson PG, Neumayer E, Damania R, Gates S (2005) Environmentalism, democracy, and pollution control. J Environ Econ Manag 49:343–365
Goulder LH (2013) Markets for pollution allowances: what are the lessons? J Econ Perspect 27:87–102
Gullberg ATh (2008) Markets for pollution allowances: what are the lessons? Energy Policy 36:29647–2972
Grossman G, Helpman E (1994) Protection for sale. Am Econ Rev 84:833–850
Hintermann B (2011) Market power, permit allocation and efficiency in emission permit markets. Environ Resour Econ 49:327–349
Holtsmark B, Sommervoll DE (2012) International emissions trading: good or bad? Econ Lett 117:362–364
Meunier G (2011) Emission permit trading between imperfectly competitive product markets. Environ Resour Econ 50:347–364
Oates WE, Portney PR (2003) The political economy of environmental policy. In: Mäler K-G, Vincent JR (eds) Handbook of environmental economics, vol I, chapter 8, pp 325–354
Wråke M, Burtraw D, Löfgren Å, Zetterberg L (2012) What have we learnt from the European Union’s emissions trading system? Ambio 41:12–22