| Title: | Competitive permit markets and vertical structures: the relevance of imperfectly competitive eco-industries (2014) |
| Authors: | Sonia Schwartz ; Hubert Stahn |
| In : | Journal of Public Economic Theory (Vol.16 N°1, February 2014) |
| Article on page: | pp. 69-95 |
| Languages: | French |
| Descriptors: |
[Eurovoc] ENVIRONMENT > environmental policy > environmental policy > environmental industry |
| Abstract: | Permit markets lead polluting firms to purchase abatement goods from an eco-industry which is often concentrated. This paper studies the consequences of this sort of imperfectly competitive eco-industry on the equilibrium choices of the competitive polluting firms. It then characterizes the second-best pollution cap. By comparing this situation to one of perfect competition, we show that Cournot competition on the abatement good market contributes not only to a nonoptimal level of emission reduction but also to a higher permit price, which reduces the production level. These distortions increase with market power, measured by the margin taken by the noncompetitive firms, and suggest a second-best larger pollution cap. |
| Doi : |
DOI : 10.1111/jpet.12048 
|
| Axe de recherche : | Trajectoires de développement durable |
| Link for e-copy: | https://halshs.archives-ouvertes.fr/halshs-00926472 |
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