Russian exports of emission permits under the Kyoto Protocol: The interplay with non-competitive fuel markets

摘要

The paper analyses optimal strategies for a country that has market power in an international market for emission permits at the same time as a domestic fuel producer participates in a non-competitive fuel export market. In particular, the effects of coordinating fuel and permit exports are explored, We show that such coordination may either increase or reduce the optimal mark-up on permits, depending on the degree of substitution between alternative fuels.