Environmental Policy, Decentralized Leadership and Horizontal Commitment Power
AbstractThis paper analyzes environmental policy in a decentralized economic federation comprising two countries, where a federal government decides upon environmental targets (maximum allowable emissions) for each country, which are implemented by the national governments. Both national governments have commitment power vis-à-vis the federal government, whereas one of the national governments (the horizontal Stackelberg leader) also has commitment power vis-à-vis the other country (the horizontal follower). The results show how the horizontal and vertical commitment power affect the horizontal leader’s use of income and production taxes, which are the tax instruments available at the national level.
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Bibliographic InfoPaper provided by Umeå University, Department of Economics in its series Umeå Economic Studies with number 753.
Length: 26 pages
Date of creation: 03 Nov 2008
Date of revision:
Contact details of provider:
Postal: Department of Economics, Umeå University, S-901 87 Umeå, Sweden
Phone: 090 - 786 61 42
Fax: 090 - 77 23 02
Web page: http://www.econ.umu.se/
More information through EDIRC
Environmental policy; Optimal taxation; Economic federation; Horizontal commitment power;
Find related papers by JEL classification:
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-11 (All new papers)
- NEP-ENE-2008-11-11 (Energy Economics)
- NEP-ENV-2008-11-11 (Environmental Economics)
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