Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/171629 
Year of Publication: 
2013
Series/Report no.: 
Economics Working Paper Series No. 13/186
Publisher: 
ETH Zurich, CER-ETH - Center of Economic Research, Zurich
Abstract: 
Under imperfect competition, the effect of a cap-and-trade system on indus- try profits depends on the type of abatement technology that is used by firms: industries that use process-integrated technologies are more affected than those using end-of-pipe abatement technologies. The interaction between environmental policy and the evolution of the market structure is then studied. In particular, a reserve of pollution permits for new entrants is justified when the industry uses a process-integrated abatement technology, while a system with a preemption right may be justified in the case of end-of-pipe abatement technology.
Subjects: 
Cap-and-trade system
imperfect competition
abatement technologies
JEL: 
L13
Q53
Q58
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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