EconPapers    
Economics at your fingertips  
 

Increasing worldwide environmental consciousness and environmental policy adjustment

Yungho Weng, Kuang-Chung Hsu and Bih Jane Liu

The Quarterly Review of Economics and Finance, 2019, vol. 71, issue C, 205-210

Abstract: Increasing worldwide environmental consciousness has been driving countries in the world to adjust their environmental policies. Conventional wisdom often suggests tightening environmental policy, but this paper challenges that wisdom. By using an oligopoly model, we show that, in the case of local pollution, a country that confronts increasing environmental consciousness tightens or slackens its environmental policy depending on the relative cost competitiveness to its rivals. However, in the case of global pollution, all countries in the world always tighten their environmental policies as worldwide environmental consciousness rises. These results derived from the optimal non-cooperative (Nash) equilibrium policy that maximizes own country’s welfare are valid in the case of efficient policy setting in which policy is chosen to maximize global welfare. The policy gap between these two equilibria may increase or decrease as environmental consciousness changes, relying on the relative competitiveness to firm’s rivals and on the initial level of environmental consciousness.

Keywords: Environmental consciousness; Nash equilibrium policy; Efficient policy; Policy gap; Environmental policy adjustment (search for similar items in EconPapers)
JEL-codes: F18 Q58 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1062976918300292
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:71:y:2019:i:c:p:205-210

Access Statistics for this article

The Quarterly Review of Economics and Finance is currently edited by R. J. Arnould and J. E. Finnerty

More articles in The Quarterly Review of Economics and Finance from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-05-11
Handle: RePEc:eee:quaeco:v:71:y:2019:i:c:p:205-210