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Voluntary provision of environmental offsets under monopolistic competition

Author

Listed:
  • Masatoshi Yoshida

    (University of Tsukuba
    Research Center for Urban Housing Sciences)

  • Stephen J. Turnbull

    (University of Tsukuba)

Abstract

In a general equilibrium model where individuals voluntarily provide offsets which compensate for degradation of environmental quality by consuming differentiated goods produced by monopolistically competitive firms, this paper examines how the population size affects the equilibrium levels of offsets and net contributions. The results depend on the specification of the utility function. However, when environmental quality converges to a finite level, the offsets are independent of this specification in a large economy with many individuals. Offsets are positive in the large economy, and “carbon neutrality” holds: Net contributions are zero. The comparative statics of parameters are also analyzed.

Suggested Citation

  • Masatoshi Yoshida & Stephen J. Turnbull, 2021. "Voluntary provision of environmental offsets under monopolistic competition," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(4), pages 965-994, August.
    • Handle: RePEc:kap:itaxpf:v:28:y:2021:i:4:d:10.1007_s10797-020-09630-5
    DOI: 10.1007/s10797-020-09630-5
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    Environmental offsets; Carbon neutrality; Monopolistic competition;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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