RT Journal Article
T1 Scarcity climate rents under a carbon price with oligopoly competition
A1 André García, Francisco Javier
A1 De Castro Lejarriaga, Luis Miguel
AB Prior research has shown that environmental policy can create scarcity rents. We analyse this phenomenon in the framework of a duopoly that faces a carbon price, considering both Cournot and Stackelberg competition. We identify the different sources of scarcity rents, which we classify in ‘output’ and ‘grandfathering’ scarcity rents. The former depend on the elasticity of the rivals’ output to the carbon price, while the latter is exogenous. We also determine under which conditions these rents can be large enough to increase firms’ profits and, as a policy implication, to what extent the existence of scarcity rents can make the firms agree on a tougher policy. This event is more likely to happen under Cournot than under Stackelberg competition, and the chances increase if the firms are allowed to pollute a large amount without paying a price.
PB Oxford University Press
SN 1464-3812
YR 2017
FD 2017
LK https://hdl.handle.net/20.500.14352/18854
UL https://hdl.handle.net/20.500.14352/18854
LA eng
NO Ministerio de Economía y Competitividad (MINECO)/FEDER
DS Docta Complutense
RD 8 abr 2025