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Plant Location, Wind Direction and Pollution Policy Under Offshoring

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  • Laixun Zhao
  • Tetsugen Haruyama

Abstract

type="main" xml:id="twec12257-abs-0001"> We examine pollution policy in a unified three-country framework, with the country in the middle playing double roles as both a polluter and a victim. We find that government preference over profits and consumer surplus to be important and so is environmentalism. In particular, the most downwind country has the least incentives to control pollution. Under oligopoly, several additional undesirable scenarios may arise, due to the interaction between wind direction and the incentive trade-offs in rent-shifting and pollution control. We analyse the mechanisms behind and provide policy guidance.

Suggested Citation

  • Laixun Zhao & Tetsugen Haruyama, 2015. "Plant Location, Wind Direction and Pollution Policy Under Offshoring," The World Economy, Wiley Blackwell, vol. 38(1), pages 151-171, January.
    • Handle: RePEc:bla:worlde:v:38:y:2015:i:1:p:151-171
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    File URL: http://hdl.handle.net/10.1111/twec.2015.38.issue-1
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    2. Kai Zhao & Xiaohui Tian & Wangyang Lai & Shuai Xu, 2024. "Agricultural production and air pollution: An investigation on crop straw fires," PLOS ONE, Public Library of Science, vol. 19(5), pages 1-16, May.
    3. Ran Jin & Xiaolin Wang, 2025. "How does the state-led megaregion affect local environmental governance? Evidence from China," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-14, December.

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