The paper considers a market currently dominated by a dirty technology that imposes significant environmental costs. A clean technology, with zero environmental costs, is introduced after the maturity of the dirty technology’s network. Adoption of the clean technology is not possible due to...

In this paper we examine the formation of International Environmental Agreement (IEAs). We provide an analytical treatment of the main model used in the literature and offer a formal solution of it (which has not been available so far), while we clarify some misconceptions that exist in the...

The Clean Air Act Amendments (CAAA) of 1990 will have a major impact on U.S. coal markets. We argue that coal suppliers will be able to use the market in sulfur dioxide emissions allowances created by the CAAA to increase the range of their competitive strategies in their core business, coal....

We examine information provision as a public policy instrument when products generate damages to consumers as well as environmental externalities. We show that information provision dominates taxation in terms of welfare, if information can be provided at low cost. This is because a uniform tax...

We examine the formation of International Environmental Agreements (IEAs). We extend the existing literature by endogenizing the reaction of the IEAs members to a deviation by a member or a group of members. We assume that when a country contemplates exiting or joining an agreement, it takes...

In this paper we examine the formation of International Environmental Agreements (IEAs). We provide an analytical treatment of the main model used in the literature and offer a formal solution of it (which has not been available so far), while we clarify some misconceptions that exist in the...

In the present paper, we analyse the interaction of a competitive market for emission permits with an oligopolistic product market. It is well known that a competitive permits market achieves the cost minimizing distribution of abatement effort among the polluting firms for a given reduction in...

It is typical for economists andpolicy makers alike to presume that competitivemarkets allocate emission permits efficiently.This paper demonstrates that competition in theemission permits market cannot assureefficiency when the product market isoligopolistic. We provide the conditions...