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Price versus quantities in the coordination of international environmental policy

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  • Anna Creti
  • Maria-Eugenia Sanin

Abstract

This work contributes to the debate on coordination of international environmental policy by revisiting Mandell (2008)’s result who, on the ground of Weitzman (1974)’s model, is in favor of a decentralized regulation at the sectorial or country level instead of a unified one. We show that whether different countries should optimally set their own environmental regulation instead of entering a common framework crucially depends on the combination between firms’ heterogeneity in abatement costs, size of the regulated sectors at the national level, as well as uncertainty on aggregate marginal abatement benefits and costs.

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File URL: http://www.cepii.fr/IE/resumeEI.asp?NoDoc=4486
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Bibliographic Info

Article provided by CEPII research center in its journal International Economics/Economie Internationale.

Volume (Year): (2011)
Issue (Month): 126-127 ()
Pages: 109-130

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Handle: RePEc:cii:cepiei:2011-q2-3-126-127-8

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Related research

Keywords: Regulation; Uncertainty; Emissions Tax; Tradable Permits;

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