Dijkstra, B.R. and Gil-Molto, M.J. (2018) Is emission intensity or output U-shaped in the strictness of environmental policy? Journal of Public Economic Theory, 20 (2). pp. 177-201. ISSN 1097-3923
Abstract
We show that, in a range of market conditions, an ever stricter environmental policy does not always lead to ever cleaner production methods and ever lower production of polluting goods. We consider an integrated technology, where firms can reduce their emission intensities in a continuous fashion. Analogous to the previous literature we find that firms' emission intensities can be U-shaped in the strictness of policy, but we show that this applies only under low profitability conditions. Under high profitability conditions, output levels are U-shaped in the strictness of the policy. The latter result is new in the literature. In the case where the U-shape arises in emission intensities, the minimum is reached where the marginal abatement cost curves intersect.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2017 Wiley Periodicals, Inc. This is an author produced version of a paper subsequently published in Journal of Public Economic Theory. Uploaded in accordance with the publisher's self-archiving policy. |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Department of Economics (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 13 Oct 2017 10:35 |
Last Modified: | 09 Jun 2020 10:22 |
Published Version: | https://doi.org/10.1111/jpet.12277 |
Status: | Published |
Publisher: | Wiley |
Refereed: | Yes |
Identification Number: | 10.1111/jpet.12277 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:122343 |