Interregional competition, spillovers and attachment in a federation
AbstractWe examine decentralized environmental policy making in a federation characterized by decentralized leadership and imperfect labor mobility due to attachment to regions. Energy consumption generates positive consumption benefits, but energy supply generates federal air pollution. Regional authorities regulate energy supply by controlling supplies of pollution permits. Energy and pollution permits are traded in interregional markets. The center redistributes incomes after it observes regional supplies of pollution permits. Regions are populated by mobile and immobile households and profits are expatriated. We show that the subgame perfect equilibrium for the federal policy game played by regional and central authorities is socially optimal.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Urban Economics.
Volume (Year): 67 (2010)
Issue (Month): 2 (March)
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Web page: http://www.elsevier.com/locate/inca/622905
Federation Interregional spillovers Redistribution Labor attachment;
Other versions of this item:
- Emilson Caputo Delfino Silva & Chikara Yamaguchi, 2003. "Interregional Competition, Spillovers and Attachment in a Federation," Anais do XXXI Encontro Nacional de Economia [Proceedings of the 31th Brazilian Economics Meeting] b53, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
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