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Environmental and Resource Economics

, Volume 50, Issue 3, pp 347–364 | Cite as

Emission Permit Trading Between Imperfectly Competitive Product Markets

  • Guy Meunier
Article

Abstract

The present paper analyzes the efficiency of emission permit trading between two imperfectly competitive product markets. Even if firms are price takers in permit markets, the integration of permit markets can decrease welfare because of imperfect competition in product markets. If there is asymmetric information between the regulator and firms, the integration of the permit markets could have a positive effect related to the flexibility of an integrated market; this flexibility can justify integrating the permit markets.

Keywords

Emission permit market Demand uncertainty Imperfect competition Market integration 

JEL Classification

D82 D43 L13 

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Copyright information

© Springer Science+Business Media B.V. 2011

Authors and Affiliations

  1. 1.Ecole PolytechniquePalaiseau CedexFrance

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