<alinea/> In this article, the different methods that can be used to distribute pollution quotas are analysed. First, we present the free of charge allocations. Then, we give several kinds of allocation which raise revenue for the government. Finally, we compare these different allocations within a...

This paper analyzes the effects of pollution permit markets on equilibrium employment in a wage-setting/price-setting (WS–PS) model. The employment level is determined according to different methods of financing unemployment benefits: a wage tax or the revenue from a pollution permit auction....

Permit markets lead polluting firms to purchase abatement goods from an eco-industry, which is often concentrated. This paper studies the consequences of imperfect competition in an eco-industry on the equilibrium choices of the competitive polluting firms. It then characterizes the second best...