Emissions Trading Empowers Firms, Undermines Environmental Protections
The article explores how environmental regulations and market power interact in the context of international trade. Researchers investigate various policies like emission taxes, minimum quality standards, emissions permits trading, and facility-specific agreements. They also study the impact of government precommitment on environmental innovation and the diffusion of abatement technologies. Findings suggest that these policies can influence firm behavior, innovation, and location decisions in a global market.