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dc.contributor.authorHeindl, Peteren_US
dc.date.accessioned2012-11-08en_US
dc.date.accessioned2012-11-08T16:16:48Z-
dc.date.available2012-11-08T16:16:48Z-
dc.date.issued2012en_US
dc.identifier.piurn:nbn:de:bsz:180-madoc-325894-
dc.identifier.urihttp://hdl.handle.net/10419/66120-
dc.description.abstractAs shown by R. Hahn [6], free allocation equal to the amount of permits a firm with market power uses in equilibrium, can prevent welfare losses. If the necessary amount of free allocation is not provided to the firm with market power, a second best solution is obtained where marginal abatement costs of regulated firms are not equated. In this paper, it is proposed that the government may change the economy wide emissions constraint (cap) as a response to market power, e.g. when free allocation cannot be adjusted. Changing the cap can lead to a situation where marginal abatement costs are equated in the presence of market power. Because changing the cap will lead to changes of social welfare, both effects must be balanced. It is shown that there exists a second best social optimum by balancing the positive effect of limiting market power and the negative effect of changing the cap.en_US
dc.language.isoengen_US
dc.publisherZentrum für Europäische Wirtschaftsforschung (ZEW) Mannheimen_US
dc.relation.ispartofseriesZEW Discussion Papers 12-065en_US
dc.subject.jelQ53en_US
dc.subject.jelL12en_US
dc.subject.jelD21en_US
dc.subject.ddc330en_US
dc.subject.keywordTradeable Permitsen_US
dc.subject.keywordMarket Poweren_US
dc.subject.keywordEnvironmental Regulationen_US
dc.titleMitigating market power under tradeable permitsen_US
dc.typeWorking Paperen_US
dc.identifier.ppn729457540en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
dc.identifier.repecRePEc:zbw:zewdip:12065-
Appears in Collections:Publikationen von Forscherinnen und Forschern des ZEW
ZEW Discussion Papers

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