Clean technology adoption and its influence on tradeable emission permit prices.

Sanin Vazquez, Maria Eugenia;Zanaj, Skerdilajda
(2009) , 5 pages

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  • Sanin Vazquez, Maria EugeniaUCLouvain
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  • Zanaj, SkerdilajdaUniversité du Luxembourg
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Abstract
In this paper we give an example in which the price of tradeable emission permits increases despite firms' adoption of a less polluting technology. This is in contrast with Montero (2002) and Parry (1998), among others. If two Counot players switch to a cleaner technology, the price for permits may increase due to an increase in the net demand for permits and a decrease in net supply of permits after the clean technology is adopted. This is only the case when output demand is elastic.
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Sanin Vazquez, M. E., & Zanaj, S. (2009). Clean technology adoption and its influence on tradeable emission permit prices. (Core Discussion Papers 2009/29). https://hdl.handle.net/2078.5/250034