RT Journal Article
T1 Industry compensation under recolation risk: a firm-level analysis of the EU emissions trading scheme
A1 Martin, Ralf
A1 Muûls, Mirabelle
A1 Preux, Laure B. de
A1 Wagner, Ulrich J
AB When regulated firms are offered compensation to prevent them from relocating, efficiency requiresthat payments be distributed across firms so as to equalize marginal relocation probabilities, weightedby the damage caused by relocation. We formalize this fundamental economic logic and apply it toanalyzing compensation rules proposed under the EU Emissions Trading Scheme, where emissionpermits are allocated free of charge to carbon intensive and trade exposed industries. We show thatthis practice results in substantial overcompensation for given carbon leakage risk. Efficient permitallocation reduces the aggregate risk of job loss by more than half without increasing aggregatecompensation
PB American Economic Association
SN 0002-8282
YR 2014
FD 2014-08
LK http://hdl.handle.net/10016/20685
UL http://hdl.handle.net/10016/20685
LA eng
NO The authors gratefullyacknowledge financial support from the British Academy (Martin), from the Leverhulme Trust (Muûls) and from the SpanishGovernment, reference numbers SEJ2007-62908 and ECO2012-31358 (Wagner).
NO 10.1257/aer.104.8.2482
DS e-Archivo
RD 28 abr. 2024