Second Best Environmental Policies under Uncertainty

Panos Hatzipanayotou, Panos Hatzipanayotou, Fabio Antoniou and Phoebe Koundouri ()
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Panos Hatzipanayotou: Athens University of Economics and Business and CES-ifo
Authors registered in the RePEc Author Service: Panos Hatzipanayotou

No 2010.3, Working Papers from Fondazione Eni Enrico Mattei

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: Strategic Environmental Policy; Pollution; Choice of Policy Instrument; Uncertainty (search for similar items in EconPapers)
JEL-codes: F12 F18 Q58 (search for similar items in EconPapers)
Date: 2010-01
New Economics Papers: this item is included in nep-ene and nep-env
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Related works:
Journal Article: Second Best Environmental Policies under Uncertainty (2012)
Working Paper: Second Best Environmental Policies under Uncertainty (2010)
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 (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2010.3

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