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Modeling competitive firms' performance under price-sensitive demand and cap-and-trade emissions constraints

机译:在价格敏感的需求和总量管制与贸易排放约束下模拟竞争性公司的绩效

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摘要

This study analytically examines the effects on profitability of using an emissions cap-and-trade policy. A game theoretic Cournot model with two competitive firms producing goods, along with undesirable emissions, for a single market is investigated. Production costs are non-linear and product demand is price-sensitive. First, relationships are derived to maximize each firm's profit under a given emissions permit price and given emissions constraints, or caps. Production volumes for each firm at the equilibrium are determined with and without the assumption that emissions permit trading can occur. Relationships are then developed to investigate behavior as a function of emissions caps, the allocation of caps between firms, and the emissions permit price. Bounds on the ranges within which permit trading will occur are also determined. Results show the conditions under which profits rise or fall as emissions constraints are tightened. The conditions under which firms benefit equally from emissions permit trading are also developed. Finally, the analysis shows that the firm with the lower emissions intensity will never purchase emissions permits if its operational costs are higher than those of the competitor. Therefore, cap-and-trade will not necessarily provide an incentive for the firm with the lowest emissions intensity to increase its market share.
机译:这项研究分析性地研究了使用排放限额与交易政策对盈利能力的影响。研究了一个具有两个竞争性公司针对单个市场生产商品以及不合要求的排放量的博弈论古诺模型。生产成本是非线性的,产品需求对价格敏感。首先,在给定的排放许可价格和给定的排放限制或上限下,得出关系以使每个公司的利润最大化。在假设和不假设会发生排放许可交易的情况下,确定处于平衡状态的每个公司的生产量。然后建立关系以调查行为与排放上限,企业之间的上限分配以及排放许可价格之间的关系。还确定了将进行许可交易的范围的界限。结果显示了在严格的排放限制条件下利润上升或下降的条件。还建立了公司从排放许可证交易中平等受益的条件。最后,分析表明,排放强度较低的公司如果其运营成本高于竞争对手的运营成本,则永远不会购买排放许可证。因此,总量控制与交易并不一定会激励排放强度最低的公司增加其市场份额。

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