Conference Agenda

Whereas hydrogen is currently a marginal energy carrier, the aim of the EU is to trigger renewable hydrogen production that covers around 10 percent of EU’s energy needs by 2050. If this comes true, it will be an energy revolution. We study competition between green and blue hydrogen by drawing on economic theory to build a model that encompasses the value chains for hydrogen and CCS. We distinguish between central hydrogen production and local hydrogen production. Under central production, natural gas is transformed to hydrogen close to the extraction site and hydrogen is then transported over a long distance to terminals. Under local hydrogen production, natural gas suppliers continue to export natural gas, but now natural gas is transformed to hydrogen at terminals located far from the extraction site. For both cases of hydrogen production, there are interrelationships with the CCS industry because also blue hydrogen requires storage of captured CO2. We find that mark-ups are highest in the case with central hydrogen production, which imply that total production of hydrogen, supply of blue hydrogen and share of plants investing in capture facilities is lower under central production than under local production. In contrast, green hydrogen production is highest under central hydrogen production.

We investigate how environmental regulation affects the effectiveness of competition policy (audits, leniency, and whistleblower programs) at deterring collusion. When competition policy is absent, the presence of environmental regulation does not affect the sustainability of collusion. When competition policy is present, however, we show that environmental policy amplifies the effectiveness of audits, leniency, and whistleblower programs at deterring collusive practices. Our results suggest that leniency and whistleblower programs can reduce rewards in regulated industries without diminishing their impact. Our findings are robust to environmental regulation being endogenous, production costs being convex, and firms competing in prices.

By affecting prices and thereby market shares of green and brown firms, product innovations and process innovations influence industry emissions even when they do not directly affect the emission intensity of the innovating firm. Using a differentiated two-stage duopoly, this paper therefore analyzes the effects of environmental policy on such innovations, and it asks how these effects differ from each other and from those of environmental innovations that directly reduce the emission intensity. The paper investigates the determinants of R\&D investments, showing in particular that incentives for certain types of potentially beneficial innovations may be negative. Moreover, it analyzes how suitable policies can foster green innovation.

In this paper, we study a theoretical model of a car market with status goods and environmental externalities, and endogenous technology choice. We study first-best taxation with individual status tax rates, we derive a second-best tax rule for a uniform status tax combined with an emission tax, and a third-best tax rule with an emission tax only. Using numerical simulations, we find that the welfare difference between first- and second-best taxation is small, while the difference between second- and third-best taxation is substantial. Using results from a related paper, we propose a "status" tax at the level of 16 Euro per horse power (PS).