In the context of an Emission Trading Scheme (ETS), we study how uncertainty over the policy parameter affects firms' investment in low carbon technologies. We develop a three period sequential model that combines the two sectors regulated by the scheme and encompasses both irreversible and...

Are environmental policies affected by the political cycle? This paper investigates if environmental spending is used as pork barrel with signaling purposes. It develops a two-period model of electoral competition where politicians use current policies to signal their preferences to rational,...

Environmental policies are often accompanied by exemptions for energy-intensive and trade-exposed industrial firms to avoid leakage from regulated to unregulated jurisdictions. This paper investigates the impact of a large electricity tax exemption on production levels, employment, and input...