Emission regulation: Prices, quantities and hybrids with endogenous technology choice

IF 5.5 3区经济学 Q1 BUSINESS Journal of Environmental Economics and Management Pub Date : 2024-05-01 DOI:10.1016/j.jeem.2024.102985

Halvor Briseid Storrøsten

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Abstract

This paper examines the investment incentives of market-based regulation, focusing on the technology characteristics that different regulatory schemes tend to incentivize. The firms’ technology choice is socially optimal if and only if the aggregate emission allowance supply is completely inelastic. Furthermore, in the presence of uncertainty, elastic emission allowance supply, and strictly convex environmental damage, it is optimal to tax investments in technologies that induce a large variance in emissions. Lastly, price elastic supply of emission allowances may either increase or decrease the volatility in the product market, depending on the risk environment the firms face. The results indicate that introduction of permit price-stabilizing measures in an emission trading system will come at the cost of suboptimal technology investments, and may also lead to increased fluctuations in product prices.

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排放监管：内生技术选择的价格、数量和混合动力

本文研究了市场化监管的投资激励机制，重点关注不同监管方案倾向于激励的技术特征。当且仅当总的排放配额供应完全无弹性时，企业的技术选择才是社会最优的。此外，在存在不确定性、有弹性的排放配额供应和严格的凸环境损害的情况下，对排放差异较大的技术投资征税是最优选择。最后，具有价格弹性的排放配额供应可能会增加或减少产品市场的波动性，这取决于企业面临的风险环境。结果表明，在排放交易体系中引入许可价格稳定措施将以次优技术投资为代价，还可能导致产品价格波动加剧。

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来源期刊

Journal of Environmental Economics and Management Multiple-

CiteScore

8.00

自引率

4.30%

发文量

期刊介绍： The Journal of Environmental Economics and Management publishes theoretical and empirical papers devoted to specific natural resources and environmental issues. For consideration, papers should (1) contain a substantial element embodying the linkage between economic systems and environmental and natural resources systems or (2) be of substantial importance in understanding the management and/or social control of the economy in its relations with the natural environment. Although the general orientation of the journal is toward economics, interdisciplinary papers by researchers in other fields of interest to resource and environmental economists will be welcomed.