Strategic Environmental Policies under International Duopolistic Competition
AbstractThis paper examines the welfare implications of trade liberalization when governments behave strategically using pollution taxes and tariffs on imports. This competition leads to inefficiencies as each government seeks foreign rent and tries to transfer pollution to the other country. It is shown that banning tariffs leads to a higher level of pollution which decreases total welfare compared to the one obtained under restricted trade. As the rate of transboundary pollution transmission rises, the pollution-shifting motive is reduced and this leads to a too high pollution level. This problem is amplified when tariffs aren't available to governments. Copyright Kluwer Academic Publishers 2001
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Bibliographic InfoArticle provided by Springer in its journal International Tax and Public Finance.
Volume (Year): 8 (2001)
Issue (Month): 5 (November)
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Web page: http://www.springerlink.com/link.asp?id=102915
Environmental Policy; Trade; Strategy;
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