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Boom, Jan Tjeerd. |
This paper compares emissions trading based on an absolute cap, denoted permit trading, with a scheme based on relative standards, denoted credit trading, under both perfect and imperfect competition. I show that credit trading is an inefficient instrument and that the two schemes have a different impact on the regulated industry. Credit trading leads to higher total output, higher marginal abatement costs and a higher number of firms in the market than permit trading. Furthermore, under both schemes the total number of firms can both decrease and increase as a result of regulation. I find that under perfect competition, permit trading gives highest welfare, while under imperfect competition, credit trading mostly leads to higher welfare. With foreign... |
Tipo: Working or Discussion Paper |
Palavras-chave: Environmental Economics and Policy. |
Ano: 2004 |
URL: http://purl.umn.edu/24214 |
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