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On pollution permits and abatement

Author

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  • Beladi, Hamid
  • Liu, Lu
  • Oladi, Reza

Abstract

We construct a dynamic general equilibrium model of pollution and study in a holistic way the environmental policies, whereby government sets up emission caps and sells emission permits at a competitive price which can be viewed as an emission tax. Then, it uses the collected tax revenues to finance public abatement activities. We characterize a steady-state equilibrium and show how it changes with the size of the economy and with a change in natural pollution absorption rate.

Suggested Citation

  • Beladi, Hamid & Liu, Lu & Oladi, Reza, 2013. "On pollution permits and abatement," Economics Letters, Elsevier, vol. 119(3), pages 302-305.
    • Handle: RePEc:eee:ecolet:v:119:y:2013:i:3:p:302-305
    DOI: 10.1016/j.econlet.2013.03.016
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    References listed on IDEAS

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    1. Chi‐Chur Chao & Eden S.H. Yu, 2000. "TRIMs, environmental taxes, and foreign investment," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 33(3), pages 799-817, August.
    2. Chao Chi-Chur & Pasquale M Sgro & Jean-Pierre Laffargue, 2012. "Environmental Control, Wage Inequality and National Welfare for a Tourism Economy," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00644023, HAL.
    3. Chao, Chi-Chur & Laffargue, Jean-Pierre & Sgro, Pasquale M., 2012. "Environmental control, wage inequality and national welfare in a tourism economy," International Review of Economics & Finance, Elsevier, vol. 22(1), pages 201-207.
    4. Chi-Chur Chao & Eden S.H. Yu, 2000. "TRIMs, environmental taxes, and foreign investment," Canadian Journal of Economics, Canadian Economics Association, vol. 33(3), pages 799-817, August.
    5. Batabyal, Amitrajeet A., 1998. "Developing countries and international environmental agreements: The case of perfect correlation," International Review of Economics & Finance, Elsevier, vol. 7(1), pages 85-102.
    6. Marjit, Sugata & Kar, Saibal & Hazari, Bharat R., 2013. "Emigration, unemployment and welfare – The role of non-traded sector," The North American Journal of Economics and Finance, Elsevier, vol. 24(C), pages 298-305.
    7. Batabyal, Amitrajeet A., 2012. "Project financing, entrepreneurial activity, and investment in the presence of asymmetric information," The North American Journal of Economics and Finance, Elsevier, vol. 23(1), pages 115-122.
    8. Copeland, Brian R & Taylor, M Scott, 1995. "Trade and Transboundary Pollution," American Economic Review, American Economic Association, vol. 85(4), pages 716-737, September.
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    Citations

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    Cited by:

    1. Pengqing Zhang, 2019. "Skill formation, environmental pollution, and wage inequality," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 62(2), pages 405-424, April.
    2. Oladi, Reza & Caplan, Arthur J. & Gilbert, John, 2018. "Sequestration and the engagement of developing economies in a global carbon market," Resource and Energy Economics, Elsevier, vol. 52(C), pages 50-63.
    3. Xing, Shiqi & Batabyal, Amitrajeet, 2019. "A Safe Minimum Standard, an Elasticity of Substitution, and the Cleanup of the Ganges in Varanasi," MPRA Paper 93846, University Library of Munich, Germany, revised 15 Mar 2019.
    4. Batabyal, Amitrajeet & Beladi, Hamid, 2020. "A Political Economy Model of the Ganges Pollution Cleanup Problem," MPRA Paper 102790, University Library of Munich, Germany, revised 28 May 2020.
    5. Ikefuji, Masako & Ono, Yoshiyasu, 2021. "Environmental policies in a stagnant economy," Economic Modelling, Elsevier, vol. 102(C).
    6. Amitrajeet A. Batabyal & Hamid Beladi, 2022. "Commuting to work in cities: Bus, car, or train?," Regional Science Policy & Practice, Wiley Blackwell, vol. 14(3), pages 599-609, June.
    7. Li, Shoude & Pan, Xiaojun, 2014. "A dynamic general equilibrium model of pollution abatement under learning by doing," Economics Letters, Elsevier, vol. 122(2), pages 285-288.
    8. Amitrajeet A. Batabyal & Hamid Beladi, 2016. "A Game Model of New and Remanufactured Goods, Brown and Green Consumers, and Market Share Dominance," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 14(2), pages 345-354, December.
    9. Batabyal, Amitrajeet, 2023. "The representative Kanpur tannery’s Ganges water pollution problem," MPRA Paper 117786, University Library of Munich, Germany, revised 19 May 2023.
    10. Jason M. Walter, 2018. "Understanding the dynamics of clean technology: implications for policy and industry," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 20(2), pages 365-386, April.
    11. Batabyal, Amitrajeet & Kourtit, Karima & Nijkamp, Peter, 2022. "Polluting tanneries and small farmers in Kanpur, India: a theoretical analysis," MPRA Paper 115216, University Library of Munich, Germany, revised 31 Aug 2022.
    12. Caplan, Arthur J. & Oladi, Reza, 2018. "Green competition, hybrid equilibrium, and establishment of a resale market," International Review of Economics & Finance, Elsevier, vol. 58(C), pages 259-269.

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    More about this item

    Keywords

    Pollution permits; Abatement; International trade;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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