Johanna-Sophia Hardt
Johanna-Sophia Hardt
Dynamic Games and Applications Seminar
Emissions Caps and Abatement R&D: The Profitability of a Zero-Emissions Cap
Sep 24, 2026 11:00 AM — 12:00 PM (Montreal time)
Zoom webinar (link)
This paper studies how asymmetric emissions caps affect firms’ decisions on output and abatement R&D in a duopoly, building on the work of Amir et al. (2023, Env Mod. Assess). The main result is that a firm facing a zero-emissions cap chooses higher output and abatement R&D than its less strictly regulated rival and, if initial unit abatement costs are sufficiently low, may earn higher payoffs. Alternatively, the model can be considered as a duopoly in which one firm receives an R&D subsidy.
(joint work with Rabah Amir)