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Taxation régionale versus nationale en présence de pollution transfrontalière

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  • Michel Cavagnac
  • Isabelle Péchoux

Abstract

We consider a two-country model of strategic trade with transboundary pollution. Environmental policy may be decided either at the regional level or at the national level. We study how changing the decision center impacts on, respectively, trade, firms? profit, environmental damage, regional and national welfare. We show that a centralized policy turns out to be in favour of domestic firm?s profit but at the cost of a bad environmental quality. Concerning the usual criterion of social welfare, we show that the policy adopted by a regional decision-maker, only concerned by local considerations, might implement a national welfare higher than the welfare achieved by a national regulator. Classification JEL : F12; F18; H23; Q28.

Suggested Citation

  • Michel Cavagnac & Isabelle Péchoux, 2010. "Taxation régionale versus nationale en présence de pollution transfrontalière," Revue économique, Presses de Sciences-Po, vol. 61(1), pages 35-56.
    • Handle: RePEc:cai:recosp:reco_611_0035
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    JEL classification:

    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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