Work

Emission Markets Linkage and Strategic Environmental Policy

Year: 2022

Type: article

Abstract: ABSTRACT This study develops a strategic environmental policy model with linked emission permit markets. We examine whether a cooperative outcome can emerge when exporting countries act non‐cooperatively. We endogenize the participation decision through a specific permit revenue‐sharing scheme. This allows the cooperative outcome to be sustained as a subgame perfect Nash equilibrium. Asymmetries across countries regarding abatement technologies and environmental preferences affect the optimal distribution of the permit revenue. Whenever these asymmetries remain within a certain range, the cooperative outcome in the non‐cooperative solution is implementable.

Source: Journal of Public Economic Theory

DOI: 10.1111/jpet.70089

Authors: Fabio Antoniou, Panos Hatzipanayotou, Nikos Tsakiris

Institutions: Athens University of Economics and Business, Ifo Institute for Economic Research, University of Ioannina

Language: English

Topic: Climate Change Policy and Economics

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $2,950

OpenAlex ID: W4417258405

FWCI: 0.197

Cites: 44

Cited by: 2

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