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Industry compensation under recolation risk: a firm-level analysis of the EU emissions trading scheme

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dc.affiliation.dptoUC3M. Departamento de EconomĂ­aes
dc.contributor.authorMartin, Ralf
dc.contributor.authorMuûls, Mirabelle
dc.contributor.authorPreux, Laure B. de
dc.contributor.authorWagner, Ulrich J
dc.date.accessioned2015-05-11T15:47:14Z
dc.date.available2015-05-11T15:47:14Z
dc.date.issued2014-08
dc.description.abstractWhen regulated firms are offered compensation to prevent them from relocating, efficiency requires that payments be distributed across firms so as to equalize marginal relocation probabilities, weighted by the damage caused by relocation. We formalize this fundamental economic logic and apply it to analyzing compensation rules proposed under the EU Emissions Trading Scheme, where emission permits are allocated free of charge to carbon intensive and trade exposed industries. We show that this practice results in substantial overcompensation for given carbon leakage risk. Efficient permit allocation reduces the aggregate risk of job loss by more than half without increasing aggregate compensationen
dc.description.sponsorshipThe authors gratefully acknowledge financial support from the British Academy (Martin), from the Leverhulme Trust (Muûls) and from the Spanish Government, reference numbers SEJ2007-62908 and ECO2012-31358 (Wagner).en
dc.description.statusPublicadoes
dc.description.uri10.1257/aer.104.8.2482
dc.format.mimetypeapplication/pdf
dc.identifier.bibliographicCitationMartin, R., de Preux, L.B., y Wagner, U.J., "Industry Compensation Under Relocation Risk: A Firm-level Analysis of the EU Emissions Trading Scheme", American Economic Review, 2014, v. 104, n. 8, pp. 2482-2508en
dc.identifier.issn0002-8282
dc.identifier.publicationfirstpage2482
dc.identifier.publicationissue8
dc.identifier.publicationlastpage2508
dc.identifier.publicationtitleAmerican Economic Reviewen
dc.identifier.publicationvolume104
dc.identifier.urihttp://hdl.handle.net/10016/20685
dc.language.isoengen
dc.publisherAmerican Economic Associationen
dc.relation.projectIDGobierno de España. ECO2012-31358es
dc.relation.publisherversionhttp://dx.doi.org/10.1257/aer.104.8.2482
dc.rights© American Economic Associationen
dc.rights.accessRightsopen accessen
dc.subject.ecienciaEconomĂ­aes
dc.subject.jelH23
dc.subject.jelH25
dc.subject.jelQ52
dc.subject.jelQ54
dc.subject.jelF18
dc.subject.otherIndustry compensationen
dc.subject.otherIndustrial relocationen
dc.subject.otherEmissions tradingen
dc.subject.otherPermit allocationen
dc.subject.otherEU ETSen
dc.subject.otherFirm dataen
dc.titleIndustry compensation under recolation risk: a firm-level analysis of the EU emissions trading schemeen
dc.typeresearch article*
dc.type.hasVersionAM*
dspace.entity.typePublication
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