Market-Based Emissions Regulation and Industry Dynamics

• 成果类型: Article
• 署名作者: Fowlie, Meredith; Reguant, Mar; Ryan, Stephen P.
• 署名单位: University of California System; University of California Berkeley; National Bureau of Economic Research; Northwestern University; University of Texas System; University of Texas Austin
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/684484
• 发表日期: 2016
• 页码: 249-302
• 关键词: multimarket contact; CEMENT INDUSTRY; COMPETITION; oligopoly; models

摘要

We assess the static and dynamic implications of alternative market-based policies limiting greenhouse gas emissions in the US cement industry. Our results highlight two countervailing market distortions. First, emissions regulation exacerbates distortions associated with the exercise of market power in the domestic cement market. Second, emissions leakage in trade-exposed markets offsets domestic emissions reductions. Taken together, these forces can result in social welfare losses under policy regimes that fully internalize the emissions externality. Market-based policies that incorporate design features to mitigate the exercise of market power and emissions leakage deliver welfare gains when damages from carbon emissions are high.