This paper presents an oligopolistic model to examine the effects of cap-and-trade regulations, carbon capture
and storage (CCS), and multiproduct cost structures on reducing pollution emissions. It investigates an oligopoly
consisting of both carbon-intensive and environmentally friendly manufacturers that produce goods and pollutants
concurrently. The findings suggest that in a quasi-competitive or Cournot-type conjectural variation (CV),
a tighter cap leads to increased pollution from the carbon-intensive manufacturer but decreased pollution in a
collusive CV. Moreover, this stricter cap notably diminishes the equity of the carbon-intensive manufacturer in a
collusive scenario and that of the green manufacturer in a quasi-competitive environment. When the green
manufacturer adopts advanced CCS technology or operates with a subadditive cost structure, pollution from the
carbon-intensive manufacturer decreases in quasi-competitive and collusive scenarios but increases under
Cournot-type CV. Meanwhile, the green manufacturer experiences the greatest equity boost with advanced CCS
technology in collusive settings, while its equity decreases most significantly with a subadditive cost structure in
quasi-competitive CV. Our contribution indicates that the efficacy of climate policies in oligopolies depends on
both multiproduct cost structures and CVs employed.
