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Population Mobility and Transboundary Environmental Problems

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  • Michael Hoel
  • Perry Shapiro

Abstract

A standard result in the literature on environmental economics is that efficient environmental policies regulating transboundary pollution will be adopted only if there is interjurisdictional coordination. Efficient policies can be adopted as a result of interregional treaties or mandated by a central authority. The present paper demonstrates that if there is perfect population mobility between the regions affected by the transboundary pollution, the efficient outcome is a Nash equilibrium of the policy game between regional authorities. This is true independently of what policies are available to the regional authorities. However, there may be more than one Nash equilibrium, so that policy coordination may be necessary in order to achieve the best equilibrium.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2001/wp-cesifo-2001-05/cesifo_wp488.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 488.

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Date of creation: 2001
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Handle: RePEc:ces:ceswps:_488

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Keywords: Transboundary pollution; population mobility; federalism;

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References

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  1. Dietmar Wellisch, 1995. "Can household mobility solve basic environmental problems?," International Tax and Public Finance, Springer, vol. 2(2), pages 245-260, August.
  2. Hercowitz, Z. & Pines, D., 1991. "Migration with Fiscal Externalities," Papers 9-91, Tel Aviv.
  3. Myers, Gordon M. & Papageorgiou, Yorgos Y., 1997. "Efficient Nash equilibria in a federal economy with migration costs," Regional Science and Urban Economics, Elsevier, vol. 27(4-5), pages 345-371, August.
  4. Silva, Emilson C. D., 1997. "Decentralized and Efficient Control of Transboundary Pollution in Federal Systems," Journal of Environmental Economics and Management, Elsevier, vol. 32(1), pages 95-108, January.
  5. Myers, Gordon M., 1990. "Optimality, free mobility, and the regional authority in a federation," Journal of Public Economics, Elsevier, vol. 43(1), pages 107-121, October.
  6. Wellisch, Dietmar, 1994. "Interregional spillovers in the presence of perfect and imperfect household mobility," Journal of Public Economics, Elsevier, vol. 55(2), pages 167-184, October.
  7. Mansoorian, Arman & Myers, Gordon M., 1993. "Attachment to home and efficient purchases of population in a fiscal externality economy," Journal of Public Economics, Elsevier, vol. 52(1), pages 117-132, August.
  8. Monderer, Dov & Shapley, Lloyd S., 1996. "Potential Games," Games and Economic Behavior, Elsevier, vol. 14(1), pages 124-143, May.
  9. Markusen, James R, 1975. "Cooperative Control of International Pollution and Common Property Resources," The Quarterly Journal of Economics, MIT Press, vol. 89(4), pages 618-32, November.
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Citations

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Cited by:
  1. Martin Daniel Siyaranamual, 2009. "Constructing the Model of Environmental Migration," Working Papers in Economics and Development Studies (WoPEDS) 200901, Department of Economics, Padjadjaran University, revised Mar 2009.
  2. Haavio, Markus, 2005. "Transboundary pollution and household mobility: Are they equivalent?," Journal of Environmental Economics and Management, Elsevier, vol. 50(2), pages 252-275, September.
  3. Naoto Aoyama & Emilson Silva, 2008. "Correlated Pollutants, Interregional Redistribution and Labor Attachment in a Federation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 41(3), pages 437-437, November.
  4. Eppink, Florian V. & Withagen, Cees A., 2009. "Spatial patterns of biodiversity conservation in a multiregional general equilibrium model," Resource and Energy Economics, Elsevier, vol. 31(2), pages 75-88, May.
  5. Hoel, Michael, 2004. "Interregional interactions and population mobility," Journal of Economic Behavior & Organization, Elsevier, vol. 55(3), pages 419-433, November.
  6. van 't Veld, Klaas & Shogren, Jason F., 2012. "Environmental federalism and environmental liability," Journal of Environmental Economics and Management, Elsevier, vol. 63(1), pages 105-119.
  7. Kunce, Mitch & Shogren, Jason F., 2007. "Destructive interjurisdictional competition: Firm, capital and labor mobility in a model of direct emission control," Ecological Economics, Elsevier, vol. 60(3), pages 543-549, January.
  8. Dijkstra, Bouwe R. & de Vries, Frans P., 2006. "Location choice by households and polluting firms: An evolutionary approach," European Economic Review, Elsevier, vol. 50(2), pages 425-446, February.
  9. Volker Arnold, 2005. "Competitive Versus Cooperative Federalism: Is a Fiscal Equalization Scheme Necessary from an Allocation Point of View?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 225(3), pages 259-282, May.
  10. Costas Hadjiyiannis & Panos Hatzipanayotou & Michael S. Michael, 2002. "Optimal Tax Policies with Private-Public Clean-Up, Cross-Border Pollution and Capital Mobility," CESifo Working Paper Series 822, CESifo Group Munich.
  11. Dijkstra, B. & Vries, F.P. de, 2004. "Location Choice by Households and Polluting Firms: An Evolutionary Approach," Discussion Paper 2004-61, Tilburg University, Center for Economic Research.
  12. Li, Xiaochun & Zhou, Yu, 2013. "Development policies, transfer of pollution abatement technology and trans-boundary pollution," Economic Modelling, Elsevier, vol. 31(C), pages 183-188.
  13. Michael Hoel & Perry Shapiro, 2004. "Transboundary Environmental Problems with Mobile but Heterogeneous Populations," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 27(3), pages 265-272, March.

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