Please use this identifier to cite or link to this item:
https://ruomo.lib.uom.gr/handle/7000/706
Title: | Using the allocation of emission permits for strategic trade purposes |
Authors: | Constantatos, Christos Filippiadis, Eleftherios Sartzetakis, Eftichios S. |
Type: | Article |
Subjects: | FRASCATI::Social sciences |
Keywords: | Tradable emissions permits Strategic trade policy |
Issue Date: | 2014 |
Source: | Journal of Regulatory Economics |
Volume: | 45 |
Issue: | 3 |
First Page: | 259 |
Last Page: | 280 |
Abstract: | We show that the presence of transaction costs in emission permit markets challenges the common presumption that grandfathering permits corresponds to lump-sum transfers with no strategic effects on output. Fixed transaction-costs influence firms’ decision to participate in the permits market, while variable transaction-costs affect firms’ output choice by creating a wedge between buyers’ and sellers’ opportunity cost of using permits. Thus, permit grandfathering can be used as a strategic trade instrument even when firms are price takers in the permit markets. Grandfathered permits differ from subsidies in that the stimulus they provide is bounded exogenously and rather limited. |
URI: | https://doi.org/10.1007/s11149-014-9244-0 https://ruomo.lib.uom.gr/handle/7000/706 |
ISSN: | 0922-680X 1573-0468 |
Other Identifiers: | 10.1007/s11149-014-9244-0 |
Appears in Collections: | Department of Economics |
Files in This Item:
File | Description | Size | Format | |
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EARE-D-12-02516 (18).pdf | 656,06 kB | Adobe PDF | View/Open |
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