Second Best Environmental Policies under Uncertainty

Fabio Antoniou, Panos Hatzipanayotou and Phoebe Koundouri ()

No 59375, Sustainable Development Papers from Fondazione Eni Enrico Mattei (FEEM)

Abstract: We construct a strategic trade model of an international duopoly, whereby production by exporting firms generates a local pollutant. Governments use environmental policies, i.e., an emissions standard or a tax, to control pollution and for rent shifting purposes. Contrary to their firm, however, governments are unable to perfectly foresee the actual level of demand, the cost of abatement and the damage caused from pollution. Under these modes of uncertainty we derive sufficient conditions under which the governments optimally choose an emissions tax over an emissions standard.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 34
Date: 2010-01
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https://ageconsearch.umn.edu/record/59375/files/NDL2010-003.pdf (application/pdf)

Related works:
Journal Article: Second Best Environmental Policies under Uncertainty (2012)
Working Paper: Second Best Environemntal Policies Under Uncertainty (2010)
Working Paper: Second Best Environmental Policies under Uncertainty (2010)
Working Paper: Second Best Environmental Policies under Uncertainty (2010)
Working Paper: Second Best Environmental Policies under Uncertainty (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:feemdp:59375

DOI: 10.22004/ag.econ.59375

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