Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/97027
Authors: 
Ben Jebli, Mehdi
Ben Youssef, Slim
Year of Publication: 
2014
Citation: 
[Journal:] Economics: The Open-Access, Open-Assessment E-Journal [Volume:] 8 [Issue:] 2014-19 [Pages:] 1-31
Abstract: 
The authors consider a symmetric model composed of two countries and a firm in each country. Firms produce the same good by means of a polluting technology which uses fossil energy. However, these firms can adopt clean technology which uses renewable energy, having lower costs. Interestingly, opening markets to international competition increases the per-unit emission-tax and decreases the per-unit production subsidy. The socially optimal adoption date under a common market better internalizes transboundary pollution than that under autarky. In autarky (resp. a common market), firms adopt the clean technology earlier (resp. later) than what is socially optimal and, therefore, regulators induce clean technology adoption at the socially optimal adoption date by firms postponing (resp. speeding up) adoption subsidies. Opening markets to international trade speeds up socially optimal adoption dates and reduces global flow of pollution.
Subjects: 
Regulation
adoption date
renewable energy
transboundary pollution
common market
JEL: 
D62
F18
H57
Q42
Q55
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/
Document Type: 
Article

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