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Strategic Manipulation on Emissions Trading Banking Program with Fixed Horizon

Author

Listed:
  • Julien Chevallier

    (EconomiX-CNRS and University Paris 10)

Abstract

This paper considers a permit market with both spatial and intertemporal trading. The intertemporal market allows firms to freely borrow or bank permits over a pre-specified period of time. When this period is over, the permit bank has to be balanced, so firms cannot avoid compliance just by borrowing from the future. Market power is introduced by assuming a large dominant agent in a Stackelberg position and a large number of small firms who are nonstrategic but forward looking. The equilibrium is characterized by for the monopoly case and for intermediate cases.

Suggested Citation

  • Julien Chevallier, 2008. "Strategic Manipulation on Emissions Trading Banking Program with Fixed Horizon," Economics Bulletin, AccessEcon, vol. 17(14), pages 1-9.
    • Handle: RePEc:ebl:ecbull:eb-08q00014
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    File URL: http://www.accessecon.com/pubs/EB/2008/Volume17/EB-08Q00014A.pdf
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    References listed on IDEAS

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    Cited by:

    1. Julien Chevallier, 2009. "Intertemporal Emissions Trading and Market Power: A Dominant Firm with Competitive Fringe Model," Working Papers halshs-00388207, HAL.
    2. Francisco J. André & Luis Miguel de Castro, 2020. "Market Power in Output and Emissions Trading," Games, MDPI, vol. 11(4), pages 1-22, October.

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    More about this item

    JEL classification:

    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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