Any need for coordination of policies towards transit traffic with a negative local externality?
AbstractInternational transit traffic between countries can be expected to increase in the future. This paper investigates whether international policy coordination is appropriate in the case of international transit traffic causing a local environmental externality. This issue is analysed in a two-country model where traffic is used as an input in production. It is found that individual optimization of the countries is likely to result in an outcome with less than optimal international traffic, i.e. too little pollution compared with optimum. Copyright Kluwer Academic Publishers 1996
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Bibliographic InfoArticle provided by European Association of Environmental and Resource Economists in its journal Environmental & Resource Economics.
Volume (Year): 8 (1996)
Issue (Month): 2 (September)
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Web page: http://www.springerlink.com/link.asp?id=100263
international policy coordination; local externality; transit traffic;
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