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Environmental standards as strategic outcomes: A simple model

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  • Bhattacharya, Rabindra N.
  • Pal, Rupayan

Abstract

This paper analyses the strategic nature of choice of environmental standards considering both local and global pollution under alternative regimes of international trade. It also compares and contrasts the strategic equilibrium environmental standards and levels of pollution, local and global, with the world optimum levels. It shows that, in case of open economies, environmental standards can be either strategic substitutes or strategic complements. On the contrary, in case of closed economies, environmental standards are always strategic substitutes. It also shows that the strategic equilibrium environmental standards in case of open economies are higher than the world optimum in certain situations. Whereas, in absence of international trade, countries set, in equilibrium, lower environmental standards than the world optimum.

Suggested Citation

  • Bhattacharya, Rabindra N. & Pal, Rupayan, 2010. "Environmental standards as strategic outcomes: A simple model," Resource and Energy Economics, Elsevier, vol. 32(3), pages 408-420, August.
    • Handle: RePEc:eee:resene:v:32:y:2010:i:3:p:408-420
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    Cited by:

    1. Rupayan Pal, 2012. "Delegation And Emission Tax In A Differentiated Oligopoly," Manchester School, University of Manchester, vol. 80(6), pages 650-670, December.
    2. Minwook Kang, 2018. "Comparative advantage and strategic specialization," Review of International Economics, Wiley Blackwell, vol. 26(1), pages 1-19, February.
    3. Rupayan Pal & Bibhas Saha, 2011. "Environmental outcomes in a model of mixed duopoly," University of East Anglia Applied and Financial Economics Working Paper Series 030, School of Economics, University of East Anglia, Norwich, UK..
    4. Rupayan Pal & Bibhas Saha, 2010. "Does partial privatization improve the environment," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2010-018, Indira Gandhi Institute of Development Research, Mumbai, India.
    5. Gautier Luis, 2019. "The Role of Multiple Pollutants and Pollution Intensities in the Policy Reform of Taxes and Standards," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 19(3), pages 1-20, July.
    6. Pal, Rupayan & Saha, Bibhas, 2015. "Pollution tax, partial privatization and environment," Resource and Energy Economics, Elsevier, vol. 40(C), pages 19-35.
    7. Luis Gautier, 2017. "Local content and emission taxes when the number of foreign firms is endogenous," Journal of Economics, Springer, vol. 122(3), pages 239-266, November.

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    More about this item

    Keywords

    Environmental standards Local pollution Global pollution Strategic choice World optimum;

    JEL classification:

    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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