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Direct versus indirect environmental regulation in a partially privatized mixed duopoly

Author

Listed:
  • Tohru Naito

    (Kushiro Public University of Economics)

  • Hikaru Ogawa

    (Nagoya University, Furocho Chikusaku)

Abstract

This article examines the optimal environmental regulation in a mixed duopolistic market wherein environmental damage is associated with production. Specifically, the effects of partial privatization on optimal policy choices, environmental damage, and social welfare are examined under three regimes: no regulation, direct regulation on emission, and the indirect regulation via Pigouvian tax. The common result under the different regimes of regulation is that the optimal level of environmental regulation critically depends on the degree of privatization, and its relationship is not monotonous. Furthermore, results show that while privatization results in different impacts on policy choices, environmental damage, and social welfare under the three different regimes, it is mostly compatible with an improvement in environmental quality.

Suggested Citation

  • Tohru Naito & Hikaru Ogawa, 2009. "Direct versus indirect environmental regulation in a partially privatized mixed duopoly," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 10(2), pages 87-100, June.
    • Handle: RePEc:spr:envpol:v:10:y:2009:i:2:d:10.1007_bf03353980
    DOI: 10.1007/BF03353980
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    References listed on IDEAS

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    Cited by:

    1. Woohyung Lee & Tohru Naito & Ki-Dong Lee, 2017. "Effects of Mixed Oligopoly and Emission Taxes on the Market and Environment," Korean Economic Review, Korean Economic Association, vol. 33, pages 267-294.
    2. Rupayan Pal & Bibhas Saha, 2011. "Environmental outcomes in a model of mixed duopoly," University of East Anglia Applied and Financial Economics Working Paper Series 030, School of Economics, University of East Anglia, Norwich, UK..
    3. Rupayan Pal & Bibhas Saha, 2014. "Mixed Duopoly and Environment," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 16(1), pages 96-118, February.
    4. Xu, Lili & Lee, Sang-Ho, 2015. "Strategic Privatization With Tariffs And Environmental Taxes In An International Mixed Duopoly," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 56(1), pages 135-154, June.
    5. Kazuhiko Kato, 2013. "Optimal degree of privatization and the environmental problem," Journal of Economics, Springer, vol. 110(2), pages 165-180, October.
    6. Chen, Hung-Yi & Yang, Ya-Po & Hu, Jin-Li, 2023. "Environmental taxes under mixed duopoly: The roles of privatization and foreign eco-technology," Economic Modelling, Elsevier, vol. 126(C).
    7. repec:hit:hitjcm:v:56:y:2015:i:1:p:135-154 is not listed on IDEAS
    8. Kadohognon Sylvain Ouattara, 2019. "Pollution abatement and partial privatization," Economics Bulletin, AccessEcon, vol. 39(3), pages 1887-1897.
    9. Lee, Sang-Ho & Nakamura, Tamotsu & Park, Chul-Hi, 2017. "Optimal Privatization Policy in a Mixed Eco-Industry in the Presence of Commitments on Abatement Technologies," MPRA Paper 80902, University Library of Munich, Germany.
    10. Susumu Cato, 2011. "Environmental policy in a mixed market: abatement subsidies and emission taxes," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 13(4), pages 283-301, December.
    11. Toshihiro Matsumura & Akira Ogawa, 2017. "Endogenous Timing in Mixed Duopolies With Externality," Australian Economic Papers, Wiley Blackwell, vol. 56(4), pages 304-327, December.
    12. Shuichi Ohori, 2012. "Environmental Tax and Public Ownership in Vertically Related Markets," Journal of Industry, Competition and Trade, Springer, vol. 12(2), pages 169-176, June.
    13. Akira Yakita & Donglin Zhang, 2022. "Environmental awareness, environmental R&D spillovers, and privatization in a mixed duopoly," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 24(3), pages 447-458, July.
    14. Feng Pian & Lili Xu & Yuyan Chen & Sang-Ho Lee, 2020. "Global Emission Taxes and Port Privatization Policies under International Competition," Sustainability, MDPI, vol. 12(16), pages 1-25, August.
    15. Pal, Rupayan & Saha, Bibhas, 2015. "Pollution tax, partial privatization and environment," Resource and Energy Economics, Elsevier, vol. 40(C), pages 19-35.
    16. Kadohognon Sylvain Ouattara, 2016. "Taxe environnementale et délégation," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 2016-10, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
    17. Xia Wang & Tingting Tan & Mingqing Xing, 2022. "Environmental awareness of the private firm and optimal privatization in a mixed duopoly," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 4055-4063, December.
    18. Kato, Kazuhiko, 2010. "Partial privatization and unidirectional transboundary pollution," MPRA Paper 27155, University Library of Munich, Germany.
    19. Jiancai Pi & Li Yang & Yu Zhou, 2013. "Privatization and environmental pollution in a mixed duopoly," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 31(2), pages 163-192.

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