Price versus quantities in the coordination of international environmental policy

Anna Creti and María Eugenia Sanin Vázquez

International Economics, 2011, issue 126-127, 109-130

Abstract: This work contributes to the debate on coordination of international environmental policy by revisiting Mandell (2008)’s result who, on the ground of Weitzman (1974)’s model, is in favor of a decentralized regulation at the sectorial or country level instead of a unified one. We show that whether different countries should optimally set their own environmental regulation instead of entering a common framework crucially depends on the combination between firms’ heterogeneity in abatement costs, size of the regulated sectors at the national level, as well as uncertainty on aggregate marginal abatement benefits and costs.

Keywords: Regulation; Uncertainty; Emissions Tax; Tradable Permits (search for similar items in EconPapers)
JEL-codes: H23 L51 Q28 Q58 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:cii:cepiie:2011-q2-3-126-127-7

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