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Joint ventures, pollution and environmental policy

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  • Roy Chowdhury, Indrani

    ()
    (National Institute of Public Finance and Policy)

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    Abstract

    We examine the impact of abatement taxes on the pollution level in a duopoly framework with endogenous market structure. We demonstrate that an increase in abatement taxes could trigger a regime-switch from joint ventures to Cournot competition, causing the pollution level to increase. Moreover, abatement taxes can implement the first best outcome if and only if the industry is not too polluting. In case it is, the second best level of taxes may or may not equal the optimal tax under either joint venture, or Cournot competition.

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    File URL: http://www.nipfp.org.in/working_paper/wp05_nipfp_031.pdf
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    Bibliographic Info

    Paper provided by National Institute of Public Finance and Policy in its series Working Papers with number 05/31.

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    Length: 28
    Date of creation: Apr 2005
    Date of revision:
    Handle: RePEc:npf:wpaper:05/31

    Note: Working Paper 31, 2005
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    Web page: http://www.nipfp.org.in

    Related research

    Keywords: Joint ventures ; Pollution ; Abatement tax ; Endogenous market structure;

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    1. Katsoulacos, Yannis & Xepapadeas, Anastasios, 1995. " Environmental Policy under Oligopoly with Endogenous Market Structure," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(3), pages 411-20, September.
    2. Ulph, Alistair, 1996. "Environmental Policy and International Trade when Governments and Producers Act Strategically," Journal of Environmental Economics and Management, Elsevier, vol. 30(3), pages 265-281, May.
    3. Alistair fnUlph, 1996. "Environmental policy instruments and imperfectly competitive international trade," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 7(4), pages 333-355, June.
    4. Roy Chowdhury, Indrani & Roy Chowdhury, Prabal, 2001. "A theory of joint venture life-cycles," International Journal of Industrial Organization, Elsevier, vol. 19(3-4), pages 319-343, March.
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