Emission Permit Trading with a Self-Interested Regulator

Research output: Contribution to journalArticleScientificpeer-review

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.
Original languageEnglish
JournalEnvironmental Economics and Policy Studies
ISSN1432-847X
Publication statusE-pub ahead of print - 16 Jan 2019
MoE publication typeA1 Journal article-refereed

Cite this

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title = "Emission Permit Trading with a Self-Interested Regulator",
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.",
author = "Palokangas, {Tapio Kalervo}",
year = "2019",
month = "1",
day = "16",
language = "English",
journal = "Environmental Economics and Policy Studies",
issn = "1432-847X",
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Emission Permit Trading with a Self-Interested Regulator. / Palokangas, Tapio Kalervo.

In: Environmental Economics and Policy Studies, 16.01.2019.

Research output: Contribution to journalArticleScientificpeer-review

TY - JOUR

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AU - Palokangas, Tapio Kalervo

PY - 2019/1/16

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N2 - 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.

AB - 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.

M3 - Article

JO - Environmental Economics and Policy Studies

JF - Environmental Economics and Policy Studies

SN - 1432-847X

ER -