Voluntary Green Commitment and Optimal Privatization Policy in a Mixed Eco-Industry

Chul-Hi Park (), Sang-Ho Lee () and Nakamura Tamotsu ()
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Nakamura Tamotsu: Graduate School of Economics, Kobe University, 2-1 Rokkodai, Nada-ku, Kobe 657-8501, Japan

Asian Journal of Law and Economics, 2022, vol. 13, issue 2, 149-171

Abstract: This study investigates the impact of target emissions from polluting firms on the production of green technology and the optimal policy decisions of privatization on the eco-industry under their voluntary commitments. For this, we formulate a vertical structure consisting of a downstream polluting industry and an upstream mixed eco-industry where private and public eco-firms produce emission abatement goods. The results show a U-shaped non-monotone relationship between environmental damage and the optimal degree of privatization, that is, welfare-maximizing public ownership is full nationalization or full or partial privatization, depending on the environmental damage. It supports that the government should have large ownership of partially privatized eco-firms for environmental protection, especially when environmental damage is serious.

Keywords: abatement goods; commitments on target emissions; eco-industry; mixed oligopoly; partial privatization (search for similar items in EconPapers)
JEL-codes: D43 L13 Q58 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (4)

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DOI: 10.1515/ajle-2022-0044

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