We investigate how corrective taxation can improve the efficiency properties of tradable quota systems affected by market power. Indeed, we show that, when there is a dominant firm in the tradable quota market, the regulator can set an ad hoc taxation on firms' traded quotas that restores cost effectiveness without driving the dominant firm's net demand to zero. Achieving cost effectiveness with market power and quota taxation implies some costs in terms of tax revenue that, however, can be justified by the corresponding reduction of compliance costs. Moreover, we see that there may be cases where all firms result to be better off after the implementation of corrective taxation.

D'Amato, A., Valentini, E., & Zoli, M. (2017). Tradable quota taxation and market power. ENERGY ECONOMICS, 63, 248-252 [10.1016/j.eneco.2017.01.024].

Tradable quota taxation and market power

D'Amato A.;Zoli M.
2017

Abstract

We investigate how corrective taxation can improve the efficiency properties of tradable quota systems affected by market power. Indeed, we show that, when there is a dominant firm in the tradable quota market, the regulator can set an ad hoc taxation on firms' traded quotas that restores cost effectiveness without driving the dominant firm's net demand to zero. Achieving cost effectiveness with market power and quota taxation implies some costs in terms of tax revenue that, however, can be justified by the corresponding reduction of compliance costs. Moreover, we see that there may be cases where all firms result to be better off after the implementation of corrective taxation.
Pubblicato
Rilevanza internazionale
Articolo
Esperti anonimi
Settore SECS-P/02 - Politica Economica
Settore SECS-P/03 - Scienza delle Finanze
Settore SECS-P/01 - Economia Politica
English
Con Impact Factor ISI
Tradable quota markets; Market power; Tradable quota taxation
https://www.sciencedirect.com/science/article/pii/S0140988317300348?via%3Dihub
D'Amato, A., Valentini, E., & Zoli, M. (2017). Tradable quota taxation and market power. ENERGY ECONOMICS, 63, 248-252 [10.1016/j.eneco.2017.01.024].
D'Amato, A; Valentini, E; Zoli, M
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/2108/197770
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