Emission trading and labor market rigidity in
an international duopoly model

Tarik Tazdaït (1) , Alejandro Caparros (2) , Jean-Chrsitophe Péreau (3)

1 CIRED - centre international de recherche sur l'environnement et le développement
2 IPP - Institute for Public Goods and Policies
3 OEP - Organisation, Efficacité, Production

Emission trading systems have been recently proposed in diffrerent regions to reduce polluting emissions (e.g. in the European Union for carbon dioxide). One of the objectives of these systems is to encourage firms to adopt advanced abatement technologies. However permits create an incentive to reduce production, which may be seen as negative by policy makers. Combining the emission trading system
with a more rigid labour market, we show conditions under which it is possible to avoid this impact keeping the incentives to improve abatement technologies. The analysis is done for oligopolistic firms engaged
in international rivalry.

Mots clés: emission trading; labor market; international rivalry

Domaines: Economies et finances

Tarik Tazdaït, Alejandro Caparros, Jean-Chrsitophe Péreau. Emission trading and labor market rigidity in
an international duopoly model. 2007. ⟨halshs-00271222⟩