Suchergebnisse

Abstract
This article discusses German and European climate policy, inquiring mainly whether the ambitious goals the EU has set itself can be achieved via the instruments presently employed for the purpose and whether these instruments are efficient. In particular we discuss shortcomings of the European emission trading system, we further level criticism at energy policy measures, notably subsidization for renewable energy sources and the overlap with emissions trading. Further we argue that while 20% reduction of CO2 is feasible at a reasonable cost, derived targets such as a share of 20% of renewable energy and 20% efficiency increase is expensive and not necessary. Finally, we scrutinize the latest climate-protection package proposed by Germany's environment minister.

In this article I survey the theoretical literature on environmental policy in the presence of imperfect competition, ranging from early contributions in the 1960s to the present. I cover the following market structures when polluting firms have market power in the output market: monopoly, Cournot oligopoly, Bertrand duopoly with homogeneous products, pricesetting duopoly with differentiating commodities, and models of monopolistic competition. Among the latter I consider Cournot oligopoly with free entry, the Dixit-Stiglitz model, and Salop?s model of the circular city with polluting firms. The regulation instruments I concentrate on are emission taxes, tradable permits, and both absolute and relative standards. I also discuss taxation when firms have market power in the input market, and I study models where firms exercise market power in the market of tradable permits. In the latter case I also survey some recent results from the literature on experimental economics. Finally, I briefly discuss environmental policy in open economies when firms have market power in international markets. Here I suggest different decompositions of the unilateral second-best optimal tax rate, thus attempting to unify alternative interpretations of these decompositions in the literature.

We investigate the interplay between environmental policy, incentives to adopt new technology, and repercussions on R&D. We study a model where a monopolistic upstream firm engages in R&D and sells advanced abatement technology to polluting downstream firms which are subject to regulation. We consider for different timing and commitment regimes of environmental tax and permit policies: ex post taxation (or issuing permits) ex interim commitment to a tax rate (a quota of permits) after observing R&D success but before adaption, and two types of ex ante commitment before R&D activity. We study the second best tax and permit rules and rank the policies with respect to welfare.