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The Existence and Uniqueness of Optimal Pollution Policy in the Presence of Victim Defense Measures

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  • McKitrick, Ross
  • Collinge, Robert A.

Abstract

It is to be expected that rational peole defend themselves against pollution externalities, at the very least through spatial separation from the source. Bu even in the simplist models, defensive generates nonconvexities, multiple optima, and inconclusive policy guidance. This calls into question the theory of environmental policy, yet the problem has been largely ignored. This paper derives a sufficient condition for a uniquely optimal emissions level in the presence of defensive activity.
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Suggested Citation

  • McKitrick, Ross & Collinge, Robert A., 2002. "The Existence and Uniqueness of Optimal Pollution Policy in the Presence of Victim Defense Measures," Journal of Environmental Economics and Management, Elsevier, vol. 44(1), pages 106-122, July.
    • Handle: RePEc:eee:jeeman:v:44:y:2002:i:1:p:106-122
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    References listed on IDEAS

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    1. de Bovenberg, A Lans & Mooij, Ruud A, 1994. "Environmental Levies and Distortionary Taxation," American Economic Review, American Economic Association, vol. 84(4), pages 1085-1089, September.
    2. Tideman, T Nicolaus & Tullock, Gordon, 1976. "A New and Superior Process for Making Social Choices," Journal of Political Economy, University of Chicago Press, vol. 84(6), pages 1145-1159, December.
    3. Bailey, Martin J, 1997. "The Demand Revealing Process: To Distribute the Surplus," Public Choice, Springer, vol. 91(2), pages 107-126, April.
    4. Mishan, E J, 1974. "What Is the Optimal Level of Pollution?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1287-1299, Nov.-Dec..
    5. Collinge, Robert A. & Bailey, Martin J., 1983. "Optimal quasi-market choice in the presence of pollution externalities," Journal of Environmental Economics and Management, Elsevier, vol. 10(3), pages 221-232, September.
    6. Kohn, Robert E, 1997. "Avoidance Costs and the Entry-Exit Condition on Polluting Firms," Scottish Journal of Political Economy, Scottish Economic Society, vol. 44(2), pages 216-224, May.
    7. Shibata, Hirofumi & Winrich, J Steven, 1983. "Control of Pollution when the Offended Defend Themselves," Economica, London School of Economics and Political Science, vol. 50(200), pages 425-437, November.
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    Citations

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    Cited by:

    1. Louis Hotte & Stanley L. Winer, 2008. "The Demands for Environmental Regulation and for Trade in the Presence of Private Mitigation," Working Papers 0810E, University of Ottawa, Department of Economics.
    2. Louis Hotte, 2010. "Democracy, inequality and the environment when citizens can mitigate privately or act collectively," Working Papers 1007E, University of Ottawa, Department of Economics.
    3. Klaus Eisenack, 2014. "The Inefficiency of Private Adaptation to Pollution in the Presence of Endogenous Market Structure," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 57(1), pages 81-99, January.
    4. Dijkstra, Bouwe R. & de Vries, Frans P., 2006. "Location choice by households and polluting firms: An evolutionary approach," European Economic Review, Elsevier, vol. 50(2), pages 425-446, February.
    5. Heuson, Clemens & Gawel, Erik & Gebhardt, Oliver & Hansjürgens, Bernd & Lehmann, Paul & Meyer, Volker & Schwarze, Reimund, 2012. "Ökonomische Grundfragen der Klimaanpassung: Umrisse eines neuen Forschungsprogramms," UFZ Reports 02/2012, Helmholtz Centre for Environmental Research (UFZ).
    6. repec:old:wpaper:344 is not listed on IDEAS
    7. Klaus Eisenack & Leonhard Kähler, 2012. "Unilateral emission reductions can lead to Pareto improvements when adaptation to damages is possible," Working Papers V-344-12, University of Oldenburg, Department of Economics, revised Jan 2012.
    8. Hotte, Louis & Winer, Stanley L., 2012. "Environmental regulation and trade openness in the presence of private mitigation," Journal of Development Economics, Elsevier, vol. 97(1), pages 46-57.
    9. Bernard, Sophie & Hotte, Louis & Winer, Stanley L., 2014. "Democracy, inequality and the environment when citizens can mitigate health consequences of pollution privately or act collectively," European Journal of Political Economy, Elsevier, vol. 34(C), pages 142-156.
    10. repec:zbw:hohpro:344 is not listed on IDEAS
    11. Heuson, Clemens & Gawel, Erik & Gebhardt, Oliver & Hansjürgens, Bernd & Lehmann, Paul & Meyer, Volker & Schwarze, Reimund, 2012. "Fundamental questions on the economics of climate adaptation: Outlines of a new research programme," UFZ Reports 05/2012, Helmholtz Centre for Environmental Research (UFZ).

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    More about this item

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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