Second Best Environmental Policies under Uncertainty

Fabio Antoniou, Panos Hatzipanayotou and Phoebe Koundouri ()

MPRA Paper from University Library of Munich, Germany

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: C0 O20 Y1 (search for similar items in EconPapers)
Date: 2009-11
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https://mpra.ub.uni-muenchen.de/122371/1/MPRA_paper_122371.pdf original version (application/pdf)

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 (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:122371

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