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Environmental Policy under Ambiguity

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  • Leon Vinokur

    (Queen Mary, University of London)

Abstract

The aim of this paper is to extend existing literature on carbon allowance allocation, investigating the impact of uncertainty and ambiguity, due to the lack of future Environmental policy, on the total production in the market. Specifically, we show that an increase in uncertainty has no effect on the total output, whereas an increase in ambiguity leads to a decrease in the total output. An output-based allocation model in Cournot Oligopoly will be used. We will adopt the National Allocation Plan (NAP) of UK for the Second Phase (2005-07) as a case study.

Suggested Citation

  • Leon Vinokur, 2009. "Environmental Policy under Ambiguity," Working Papers 638, Queen Mary University of London, School of Economics and Finance.
    • Handle: RePEc:qmw:qmwecw:638
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    File URL: https://www.qmul.ac.uk/sef/media/econ/research/workingpapers/2009/items/wp638.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Carbon allowances; Permits allocation; EU ETS; Uncertainty;
    All these keywords.

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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