Emission charges could lead to monopolies, higher pollution
The study looked at how charging companies for emissions affected their actions and the environment in a competitive market. When emission charges increased as emissions went up, duopoly (two competing companies) stayed stable. But when charges decreased with emissions, duopoly became shaky, and one company took over. The research found that when it's easier for one big company to dominate, both production levels and emissions are higher compared to a fairer system allowing two companies to compete.