Environmental Regulation in a Mixed Economy

Guangliang Ye and Jinhua Zhao

Environmental & Resource Economics, 2016, vol. 65, issue 1, No 13, 273-295

Abstract: Abstract Many developing countries are mixed economies in which public and private firms engage in Cournot competition. We show that some fundamental results in environmental economics fail to hold in these economies: more stringent environmental regulation does not necessarily reduce pollution levels, the equivalence between environmental taxes and standards breaks down, and not every emission level can be induced by emission taxes. These results are due to the endogeneity of the public firm CEO’s career choices. Instruments that can induce the CEO to choose a public career are most effective in reducing emissions and improving social welfare.

Keywords: Mixed economy; Environmental regulation; Developing countries (search for similar items in EconPapers)
JEL-codes: L13 L32 Q58 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (8)

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DOI: 10.1007/s10640-015-9932-y

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