IDEAS home Printed from https://ideas.repec.org/a/wly/canjec/v35y2002i4p805-818.html

Can cross–border pollution reduce pollution?

Author

Listed:
  • Panos Hatzipanayotou
  • Sajal Lahiri
  • Michael S. Michael

Abstract

We develop a two–country model of foreign aid and cross–border pollution resulting from production activities in the recipient country. There is both private and public abatement of pollution, the latter being financed through emissions tax revenue and foreign aid. We characterize a Nash equilibrium in which the donor country chooses the amount of aid and the recipient chooses the fraction of aid allocated to pollution abatement and the emission tax rate. At this equilibrium, an increase in the donor’s perceived rate of cross–border pollution reduces emission levels. JEL Classification: Q28, F35, H41 Est–ce que la pollution trans–frontière peut réduire le niveau de pollution? Les auteurs développent un modèle à deux pays d’aide à l’étranger et de pollution trans–frontière résultant d’activités de production dans le pays qui reçoit l’aide. Il existe des efforts privés et publics pour réduire la pollution, ces derniers étant financés par les rentrées fiscales d’une taxe sur la pollution et par l’aide étrangère. On définit un équilibre à la Nash pour lequel le pays donateur choisit le montant de l’aide, et le pays récipiendaire choisit la fraction de l’aide étrangère qu’il allouera à la lutte à la pollution ainsi que le taux de taxation sur la pollution. A cet équilibre, un accroissement dans le taux de pollution trans–frontière perçu par le donataire réduit le taux de pollution.

Suggested Citation

  • Panos Hatzipanayotou & Sajal Lahiri & Michael S. Michael, 2002. "Can cross–border pollution reduce pollution?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 35(4), pages 805-818, November.
  • Handle: RePEc:wly:canjec:v:35:y:2002:i:4:p:805-818
    DOI: 10.1111/1540-5982.00155
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1540-5982.00155
    Download Restriction: no

    File URL: https://libkey.io/10.1111/1540-5982.00155?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    More about this item

    JEL classification:

    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:canjec:v:35:y:2002:i:4:p:805-818. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1111/(ISSN)1540-5982 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.