Title of Paper:Does emission permit allocation affect CO2cost pass-through? A theoretical analysis

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Affiliation of Author(s):经济与管理学院

Journal:Energy Econ.

Abstract:Carbon emissions trading may result in CO2cost pass-through and its rate is influenced by a number of factors. This paper theoretically investigates how emission permit allocation affects CO2cost pass-through rate by developing a Nash-Cournot oligopolistic market equilibrium model. We find that the derived CO2cost pass-through rates are consistent when grandfathering and auctioning rules are used for permit allocation, which are higher than that for benchmarking rule. It has also been found that the magnitude of CO2cost pass-through rate is relevant to the type of definition, product market structure and average carbon intensity of the industry. We suggest that policy makers first use benchmarking rule to attract firms to participate at the early stage of emissions trading system (ETS) and then take auctioning rule when ETS is well developed. © 2017 Elsevier B.V.

ISSN No.:0140-9883

Translation or Not:no

Date of Publication:2017-08-01

Co-author:王梅

Correspondence Author:zp