Absentee Ownership of Immobile Factors and Environmental Policies in a Federation
AbstractThis paper studies the effects of absentee ownership of immobile factors on environmental policy of a jurisdiction in a federation. An increase in emissions in a jurisdiction increases factor incomes, but part of the increased factor incomes goes to absentee owners while only the residents of the jurisdiction bear the full disutility. In addition, the increase in emissions in a jurisdiction attracts capital and decreases capital in other jurisdictions, reducing the incomes that the residents of the jurisdiction earn from owning immobile factors in other jurisdictions. Absentee ownership thus reduces the marginal benefit of an increase in emissions while it leaves the marginal cost unaffected from the jurisdiction’s perspective. As a consequence, absentee ownership makes environmental policy of a jurisdiction too stringent relative to the efficient level. The paper also considers the effects of absentee ownership on environmental policy when goods trade is allowed. Copyright Springer 2005
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Bibliographic InfoArticle provided by European Association of Environmental and Resource Economists in its journal Environmental & Resource Economics.
Volume (Year): 32 (2005)
Issue (Month): 3 (November)
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Web page: http://www.springerlink.com/link.asp?id=100263
environmental competition; factors of production; ownership structure; trade; H71; H73; Q28;
Find related papers by JEL classification:
- H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
- H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
- Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
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- Bárcena-Ruiz, Juan Carlos & Campo, María Luz, 2012.
"Partial cross-ownership and strategic environmental policy,"
Resource and Energy Economics,
Elsevier, vol. 34(2), pages 198-210.
- Bárcena Ruiz, Juan Carlos & Campo Corredera, María Luz, 2011. "Partial cross-ownership and strategic environmental policy," IKERLANAK 2011-47, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.
- Fredriksson, Per G. & Matschke, Xenia & Minier, Jenny, 2010.
"Environmental policy in majoritarian systems,"
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