EconPapers    
Economics at your fingertips  
 

Tradable Permits vs Ecological Dumping

Phoebe Koundouri (), Fabio Antoniou () and Panos Hatzipanayotou ()
Additional contact information
Panos Hatzipanayotou: Athens University of Economics and Business

No 1002, DEOS Working Papers from Athens University of Economics and Business

Abstract: In this paper we examine an alternative policy scenario, where governments allow polluting Ã??rms to trade permits in a strategic environmental policy model. We demonstrate, among other things, that with no market power in the permits market, governments of the exporting firms do not have an incentive to under-regulate pollution in order to become more competitive. This strategic effect is reversed and leads to a welfare level closer to the cooperative one and strictly higher to that when permits are non-tradable. Allowing for market power in the permits market, the incentive to under-regulate pollution re-appears regardless of whether permits are tradable or not. With tradable permits, however, the incentive to under-regulate pollution is comparatively weaker relative to the case of non-tradable permits. This entails potential benefits for the exporting Ã??rms and countries since the prisonersÃ??dilemma is moderated.

Keywords: Strategic environmental policy; Tradable permits; Race to the top (search for similar items in EconPapers)
JEL-codes: Q58 F12 F18 (search for similar items in EconPapers)
Date: 2009-02-01
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://wpa.deos.aueb.gr/docs/Antoniou.pdf First version (application/pdf)

Related works:
Working Paper: Tradable Permits vs Ecological Dumping (2010) Downloads
Working Paper: Tradable Permits vs Ecological Dumping (2010) Downloads
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:aue:wpaper:1002

Access Statistics for this paper

More papers in DEOS Working Papers from Athens University of Economics and Business Contact information at EDIRC.
Series data maintained by Ekaterini Glynou ().

 
Page updated 2017-11-07
Handle: RePEc:aue:wpaper:1002