Environmental Taxes, Abatement Effort and Green Trade Unions in an Oligopoly Market

Elias Asproudis () and Eleftherios Filippiadis ()
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Elias Asproudis: Swansea University, School of Social Sciences, Department of Economics, UK
Eleftherios Filippiadis: Department of Economics, University of Macedonia, Greece

Discussion Paper Series from Department of Economics, University of Macedonia

Abstract: This paper examines how environmental taxes, abatement effort, and green trade unions interact within a differentiated duopoly under decentralised and centralised wage setting structures. We show that trade union environmental awareness acts as a substitute for environmental taxation: as unions internalize local damages in wage negotiations, the regulator optimally chooses a lower emissions tax. Centralised wage bargaining leads to higher wages and lower emissions, while decentralised bargaining yields higher output, profits, and social welfare. From a policy perspective, we argue that incorporating green trade unions’ environmental preferences into environmental governance can improve efficiency of the environmental policy taxation.

Keywords: environmental tax; abatement effort; green trade unions; environmental damages; labour market structure (search for similar items in EconPapers)
JEL-codes: D43 H2 J5 L13 Q5 (search for similar items in EconPapers)
Date: 2026-03, Revised 2026-03
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Persistent link: https://EconPapers.repec.org/RePEc:mcd:mcddps:2026_03

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