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In page Emissions trading:
"In Coase's model of social costs, either choice (grandfathering or auctioning) leads to efficiency. In reality, grandfathering subsidizes polluters, meaning that polluting industries may be kept in business longer than would otherwise occur.[citation needed] Grandfathering may also reduce the rate of technological improvement towards less polluting technologies (Fisher et al., 1996, p. 417).
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