Trading carbon emissions has emerged as a promising solution for combating global warming and aligning economic interests with environmental goals. As the potential to become one of the world’s largest markets, estimates indicate that the carbon credits market could reach impressive values, attracting both corporations looking to offset their carbon footprint and governments striving to...Read More

Regulation to control carbon emissions forces firms to think hard about their optimal policy for carbon management. We set out a unified approach to studying the trade-offs posed by carbon pricing for firms and how they should therefore best respond. Our model reveals that although carbon pricing curtails firms’ carbon emissions, polluting firms tilt their...Read More