Strategic environmental regulation of multiple pollutants
Stefan Ambec and
Jessica Coria
No 626, Working Papers in Economics from University of Gothenburg, Department of Economics
Abstract:
We analyze the interplay between policies aimed to control global and local pollution such as greenhouse gases and particulate matter. The two types of pollution interact in the abatement cost function of the polluting firms through economies or diseconomies of scope. They are regulated by distinct entities (global versus local), potentially with di¤erent instruments that are designed according to some specific agenda. We show that the choice of regulatory instrument and the timing of the regulations matter for efficiency. Emissions of local pollution are distorted if the local regulators anticipate that global pollution will later be regulated through emission caps. The regulation is too (not enough) stringent when abatement efforts exhibit economies (diseconomies) of scope. In contrast, we obtain e¢ ciency if the global pollutant is regulated by tax provided that the revenues from taxing emissions are redistributed to the local communities in a lump-sum way.
Keywords: environmental regulation; multiple-pollutants; policy spillovers; emission tax; emission standard; emissions trading (search for similar items in EconPapers)
JEL-codes: D62 Q50 Q53 Q54 Q58 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2015-09
New Economics Papers: this item is included in nep-agr, nep-ene, nep-env and nep-reg
References: Add references at CitEc
Citations:
Downloads: (external link)
http://hdl.handle.net/2077/40539 (text/html)
Related works:
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:hhs:gunwpe:0626
Ordering information: This working paper can be ordered from
jessica.oscarsson@economics.gu.se
Access Statistics for this paper
More papers in Working Papers in Economics from University of Gothenburg, Department of Economics Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Jessica Oscarsson (jessica.oscarsson@economics.gu.se).