Emission Permits and Public Pollution Abatement:: Can Decentralized Environmental Policies be Efficient?

Nikos Tsakiris (), Panos Hatzipanayotou and Michael Michael

No 5278, CESifo Working Paper Series from CESifo

Abstract: We build a two regions general equilibrium model with cross-border pollution and either international or only inter-regional capital mobility. To control pollution each region uses public pollution abatement and issues either intra-regionally or inter-regionally tradable emission permits. We analyze the non-cooperative (decentralized) and cooperative (centralized) equilibrium level of emission permits and we examine when and how cross-border pollution and the type of capital mobility affect these equilibrium policies. We provide the welfare ranking of the policies in the various cases and we investigate under what conditions the decentralized and centralized equilibrium policies are equally efficient.

Keywords: cross-border pollution; tradable emission permits; international capital mobility; public pollution abatement (search for similar items in EconPapers)
JEL-codes: F18 F21 H21 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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