Strategic Behavior and the Environment > Vol 4 > Issue 1

Pollution and Environmentalists' Participation in Emissions Trading Systems

Elias Asproudis, Northampton Business School, University of Northampton, United Kingdom, Ilias.Asproudis@northampton.ac.uk Maria José Gil-Moltó, Dept Economics, University of Sheffield, United Kingdom, m.j.gil-molto@sheffield.ac.uk
 
Suggested Citation
Elias Asproudis and Maria José Gil-Moltó (2014), "Pollution and Environmentalists' Participation in Emissions Trading Systems", Strategic Behavior and the Environment: Vol. 4: No. 1, pp 59-87. http://dx.doi.org/10.1561/102.00000044

Published: 22 Apr 2014
© 2014 E. Asproudis and M. J. Gil-Moltó
 
Subjects
Environmental Economics,  Collective action,  Climate Change,  Interest groups
 
Keywords
L13Q55O31
Emissions trading systemsabatementinduced technological changeenvironmental group
 

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In this article:
1. Introduction
2. The Model
3. The Environmental Group is Not Allowed to Participate in the ETS Market
4. The Environmental Group is Allowed to Participate in the ETS Market
5. Comparison of Output and Emissions Levels
6. Robustness Checks and Extensions
7. Conclusions and Discussion
Appendix: Proofs

Abstract

In this paper, we show that the participation by an environmental group in a permit market does not necessarily result in more investment in abatement or even less pollution. There is a U-shaped relationship between the emission per unit of output and the extra weight given by the environmental group to the reduction of emissions. For high values of this weight, firms invest less in abatement but also produce less. For lower values, firms invest more in abatement but also produce more, which may result in higher emissions levels.

DOI:10.1561/102.00000044