A Note on Clean Technology Adoption and its Influence on Tradeable Emission Permits Prices

Sanin Vazquez, Maria Eugenia;Zanaj, Skerdilajda
(2011) Environmental and Resource Economics — Vol. 48, n° 4, p. 561-567 (2011)

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Authors
  • Sanin Vazquez, Maria EugeniaUCLouvain
    Author
  • Zanaj, Skerdilajda
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Abstract
In this paper, we give an example in which the price of tradable emission permits increases despite firms' adoption of less polluting technology, a result that is in contrast with Montero (J Environ Econ 44:23-44, 2002) and Parry (J Regul Econ 14:229-254, 1998), among others. If two Cournot 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 the net supply of permits after the clean technology is adopted. This is only the case when output demand is quite elastic. © 2010 Springer Science+Business Media B.V.
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Sanin Vazquez, M. E., & Zanaj, S. (2011). A Note on Clean Technology Adoption and its Influence on Tradeable Emission Permits Prices. Environmental and Resource Economics, 48(4), 561-567. https://doi.org/10.1007/s10640-010-9403-4 (Original work published 2011)