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An Advantage of Emission Intensity Regulation for Emission Cap Regulation in a Near-Zero Emission Industry

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  • Hirose, Kosuke
  • Matsumura, Toshihiro

Abstract

We revisit command-and-control regulations and compare their efficiencies, in particular, an emission cap regulation that restricts total emissions and an emission intensity regulation that restricts emissions per unit of output under emission equivalence. We find that in both the most stringent target case, when the target emission level is close to zero, and the weakest target case, when the target emission level is close to business as usual, emission intensity yields greater welfare, although the same may not be true in moderate target cases.

Suggested Citation

  • Hirose, Kosuke & Matsumura, Toshihiro, 2018. "An Advantage of Emission Intensity Regulation for Emission Cap Regulation in a Near-Zero Emission Industry," MPRA Paper 90134, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:90134
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    References listed on IDEAS

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    More about this item

    Keywords

    near-zero emission industry; emission cap; emission intensity; emission equivalence;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

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