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Too many traders? On the welfare ranking of prices and quantities

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  • Pauli Lappi

    (University of Helsinki)

Abstract

This study conducts a welfare comparison of emission tax and emissions trading in a multi-period model, in which the regulation instruments are chosen through a political process and unregulated participants can trade in the permit market. It is found that under reasonable conditions a tax yields a higher welfare level than emissions trading.

Suggested Citation

  • Pauli Lappi, 2017. "Too many traders? On the welfare ranking of prices and quantities," Economics Bulletin, AccessEcon, vol. 37(3), pages 1959-1965.
    • Handle: RePEc:ebl:ecbull:eb-17-00213
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2017/Volume37/EB-17-V37-I3-P176.pdf
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    References listed on IDEAS

    as
    1. PAOLO COLLA & MARC GERMAIN & VINCENT Van STEENBERGHE, 2012. "Environmental Policy and Speculation on Markets for Emission Permits," Economica, London School of Economics and Political Science, vol. 79(313), pages 152-182, January.
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    More about this item

    Keywords

    Emissions trading; Emission tax; Lobbying; Welfare;
    All these keywords.

    JEL classification:

    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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