CEIS-Tor Vergata is pleased to inform you that, on Friday November 18, 2011 at 12.00 pm, prof. Luca Taschini (London School of Economics) will present a paper on “Pollution Permits, Strategic Trading and Dynamic Technology Adoption”The Seminar will be held at the Faculty of Economics, University of Rome "Tor Vergata", B-building, 1° floor, room B Please, go to www.ceistorvergata.it for the complete list of seminars and events at CEIS. How to reach us: http://web.uniroma2.it/mobilita/index.html http://www.economia.uniroma2.it/area.asp?a=867 ABSTRACT This paper analyzes the dynamic incentives for technology adoption under a transferable permits system, which allows for strategic trading on the permit market. Initially, firms can invest both in low-emitting production technologies and trade permits. In the model, technology adoption and allowance price are generated endogenously and are inter-dependent. It is shown that the non-cooperative permit trading game possesses a pure-strategy Nash equilibrium, where the allowance value reflects the level of uncovered pollution (demand), the level of unused allowances (supply), and the technological status. These conditions are also satisfied when a price support instrument, which is contingent on the adoption of the new technology, is introduced. Numerical investigation confirms that this policy generates a floating price floor for the allowances, and it restores the dynamic incentives to invest. Given that this policy comes at a cost, a criterion for the selection of a self-financing policy (based on convex risk measures) is proposed and implemented. Barbara Piazzi __________ Informazioni da ESET NOD32 Antivirus, versione del database delle firme digitali 6621 (20111111) __________ Il messaggio è stato controllato da ESET NOD32 Antivirus. www.nod32.it |
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