Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/62997
Authors: 
Hagem, Cathrine
Westskog, Hege
Year of Publication: 
2005
Series/Report no.: 
Memorandum, Department of Economics, University of Oslo 2005,04
Abstract: 
In this paper we analyze how restricting intertemporal trading by prohibiting borrowing of emission permits affects the ability of a dominant agent to exploit its market power, and the consequences this has for the cost-effectiveness of implementing an emissions target. We show that the monopolist could take advantage of the constraint on borrowing by distributing the sale of permits ineffectively across periods, and moreover that this inefficiency is influenced by the way permits are initially allocated between agents. A cost-effective distribution of abatement across periods can be achieved by an appropriate distribution of the total endowments of permits over time for each agent.
Subjects: 
pollution permits
intertemporal trading
market power
borrowing constraint
JEL: 
D92
H74
Q52
Document Type: 
Working Paper

Files in This Item:
File
Size
266.54 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.