Emission permits and the dynamics of clean and dirty firms in an evolutionary competition model
Metroeconomica, 2019, Vol. 70, No. 3, pp. 476-487[Florence School of Regulation], [Climate]
ANTOCI, Angelo, BORGHESI, Simone, IANNUCCI, Gianluca, RUSSU, Paolo, Emission permits and the dynamics of clean and dirty firms in an evolutionary competition model, Metroeconomica, 2019, Vol. 70, No. 3, pp. 476-487[Florence School of Regulation], [Climate] - https://hdl.handle.net/1814/63556
Retrieved from Cadmus, EUI Research Repository
Emission Trading Systems (ETSs) are today regarded as the pillar of market‐based environmental policies in many countries. This paper studies the impact of an ETS on the dynamics of the market made up of two types of firms: clean and dirty. Using an evolutionary context, we study how the share of clean firms evolves at different parameter values, such as increasing values of the permits’ price floor, and show that an ETS can have positive effects on the diffusion of the clean technology. However, numerical simulations show that under specific parameter values the opposite result may emerge with clean firms leaving the market.
First published: 01 April 2019
Cadmus permanent link: https://hdl.handle.net/1814/63556
Full-text via DOI: 10.1111/meca.12252
ISSN: 0026-1386; 1467-999X
Series/Number: [Florence School of Regulation]; [Climate]
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