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Domestic and international strategic interactions in environment policy formation

Kazuharu Kiyono () and Masahiro Okuno-Fujiwara ()

Economic Theory, 2003, vol. 21, issue 2, 613-633

Abstract: In this paper, we establish the most possilbe general formulation of the technology governing carbon-gas emission, giving rise to global external diseconomies, and ty to explore into the strategic interactions,both domestic and international, when an individual country decides on the environmental policies. Through the comparison among emission taxes, quotas, and standard in the perfectly competitive private economies, we find that the first two policies are equivalent but they are different in effects by virtue of what we may call the tax-exemption effect of emission standards. Such a difference in the policy effect further affects the other country's welfare through the global externalities, amplified through whether the government can precommit to either the emission tax or the emission standard. Copyright Springer-Verlag Berlin Heidelberg 2003

Keywords: Keywords and Phrases: Global warming; Emission tax; Emission quota; Emission standard; Strategic interaction; Tax exemption.; JEL Classification Numbers: D61; D78; H23; H77. (search for similar items in EconPapers)
Date: 2003
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DOI: 10.1007/s00199-002-0300-0

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