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Spatial dimensions of environmental policies for transboundary externalities: a spatial price equilibrium approach

  • Erik T Verhoef
  • Peter Nijkamp

In this paper we present a framework for analyzing spatial aspects of environmental policies in the regulation of transboundary externalities. A spatial price equilibrium model for two regions is constructed, where interactions between these regions can occur via trade, via mutual environmental spillovers as a result of the externality that arises from production, and via uncoordinated taxes when the regions do not behave cooperatively. The additional complications arising from emissions caused by the endogenous transport flows are also considered explicitly. We consider the performance of production taxes, consumption taxes, and the combination of these two, both with and without optimal policy coordination.

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Article provided by Pion Ltd, London in its journal Environment and Planning A.

Volume (Year): 32 (2000)
Issue (Month): 11 (November)
Pages: 2033-2055

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Handle: RePEc:pio:envira:v:32:y:2000:i:11:p:2033-2055
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  1. Rauscher, Michael, 1994. "On Ecological Dumping," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 822-40, Supplemen.
  2. Markusen, James R., 1975. "International externalities and optimal tax structures," Journal of International Economics, Elsevier, vol. 5(1), pages 15-29, February.
  3. Adam B. Jaffe et al., 1995. "Environmental Regulation and the Competitiveness of U.S. Manufacturing: What Does the Evidence Tell Us?," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 132-163, March.
  4. James R. Markusen & Edward R. Morey & Nancy Olewiler, 1991. "Environmental Policy When Market Structure and Plant Locations are Endo-genous," NBER Working Papers 3671, National Bureau of Economic Research, Inc.
  5. Krutilla, Kerry, 1989. "Tariff burdens and optimal tariffs under alternative transport cost and market structures," Economics Letters, Elsevier, vol. 31(4), pages 381-386, December.
  6. 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.
  7. Markusen, James R, 1975. "Cooperative Control of International Pollution and Common Property Resources," The Quarterly Journal of Economics, MIT Press, vol. 89(4), pages 618-32, November.
  8. Krutilla, Kerry, 1991. "Environmental regulation in an open economy," Journal of Environmental Economics and Management, Elsevier, vol. 20(2), pages 127-142, March.
  9. Copeland Brian R., 1994. "International Trade and the Environment: Policy Reform in a Polluted Small Open Economy," Journal of Environmental Economics and Management, Elsevier, vol. 26(1), pages 44-65, January.
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