Rent-seeking over Tradable Emission Permits : Theory and Evidence ∗

  • Ashwin Rode
  • Published 2013
The allocation of costless permits during the establishment of an emission permit trading program creates incentives for rent-seeking. I hypothesize that firms with strong political connections have an advantage in rent-seeking, which I model as a low rent-seeking cost in a contest for permits. Low rent-seeking costs are predicted to yield a higher permit… CONTINUE READING