Tradable Emission Permits and Strategic Capital Taxation

Nikos Tsakiris (), Panos Hatzipanayotou and Michael Michael

University of Cyprus Working Papers in Economics from University of Cyprus Department of Economics

Abstract: In a model of two large asymmetric countries, we examine the effectiveness of the non-cooperative setting of tradable emission permits in reducing global pollution, under different rules of international taxation of capital earnings. Our key result is that, under certain conditions, the lowest Nash equilibrium level of global pollution is achieved when the policy-mix combines internationally, rather than nationally, tradable emission permits and either capital-tax exemptions or capital-tax credits.

Keywords: Emission Permits; Cross-border Pollution; Capital Tax Competition; Capital Tax Rules (search for similar items in EconPapers)
JEL-codes: F18 F21 H21 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2022-01-14
New Economics Papers: this item is included in nep-acc, nep-env, nep-gth and nep-opm
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Working Paper: Tradable Emission Permits and Strategic Capital Taxation (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:ucy:cypeua:01-2022

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