One argument in favor of market based pollution control policies is sometimes exaggerated, and a different argument is usually ignored. Regardless of whether investment is fixed or endogenous, market based policies might lead to a higher or lower equilibrium abatement compared to the level under...

Motivated by the German postal market, this paper analyzes the effects of regulatory uncertainty about labor costs for investment into a liberalized market. We distinguish between the external investment margin (market entry) and the internal investment margin (technology) and establish that...

Price volatility in green certificate markets reflects uncertainty over future prices, representing a major source of risk for renewable energy generators. Price risk is considered the principal deficiency of this market-based policy since it causes investors to require higher returns. Moreover,...

Investment opportunities in electric power generation have changed dramatically since electricity industry restructuring first began. In contrast to regulated utilities adding capacity in line with central planning and regulation, power plant investment is now more often made by independent...

Policy uncertainty can be a powerful deterrent to immediate investments. Based on panel data of 214 licenses to construct small run-of-the-river hydropower plants, we examine whether the prospect of a common Swedish–Norwegian market for green certificates (i.e., a renewable portfolio standard...

Disagreement over the form of regulation of greenhouse gasses motivates a comparison of market based and command and control policies. More efficient policies can increase aggregate marginal abatement cost, resulting in higher emissions. Multiple investment equilibria and “regulatory...