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Price versus quantities in the coordination of international environmental policy


  • Anna Creti
  • Maria-Eugenia Sanin


This work contributes to the debate on coordination of international environmental policy by revisiting Mandell (2008)’s result who, on the ground of Weitzman (1974)’s model, is in favor of a decentralized regulation at the sectorial or country level instead of a unified one. We show that whether different countries should optimally set their own environmental regulation instead of entering a common framework crucially depends on the combination between firms’ heterogeneity in abatement costs, size of the regulated sectors at the national level, as well as uncertainty on aggregate marginal abatement benefits and costs.

Suggested Citation

  • Anna Creti & Maria-Eugenia Sanin, 2011. "Price versus quantities in the coordination of international environmental policy," International Economics, CEPII research center, issue 126-127, pages 109-130.
  • Handle: RePEc:cii:cepiie:2011-q2-3-126-127-7

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    Cited by:

    1. Stephanie-Carolin Grosche, 2014. "What Does Granger Causality Prove? A Critical Examination of the Interpretation of Granger Causality Results on Price Effects of Index Trading in Agricultural Commodity Markets," Journal of Agricultural Economics, Wiley Blackwell, vol. 65(2), pages 279-302, June.
    2. Böhringer, Christoph & Keller, Andreas & Bortolamedi, Markus & Rahmeier Seyffarth, Anelise, 2016. "Good things do not always come in threes: On the excess cost of overlapping regulation in EU climate policy," Energy Policy, Elsevier, vol. 94(C), pages 502-508.

    More about this item


    Regulation; Uncertainty; Emissions Tax; Tradable Permits;

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy


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