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Pollution, Pigouvian Taxes, and Asymmetric International Oligopoly

Author

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  • Ngo Van Long
  • Antoine Soubeyran

Abstract

We derive emission tax rules that take into account (i) the rent-shifting argument, (ii) the need to mitigate transboundary pollution, (iii) correction for restrictive oligopoly output, and (iv) correction for domestic coordination of outputs. We show that trade liberalization does not necessarily result in more pollution. Nous obtenons des règles de taxation sur la pollution qui tiennent compte de l'argument sur la redistribution des rentes, du besoin d'éviter la pollution transfrontalière, de la correction pour le volume insuffisant de l'output d'un oligopole, et de la correction pour le manque de coordination entre les firmes domestiques. Nous montrons que la libéralisation du commerce mondial n'entraîne pas nécessairement une augmentation du niveau de pollution.

Suggested Citation

  • Ngo Van Long & Antoine Soubeyran, 1998. "Pollution, Pigouvian Taxes, and Asymmetric International Oligopoly," CIRANO Working Papers 98s-30, CIRANO.
  • Handle: RePEc:cir:cirwor:98s-30
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    File URL: http://www.cirano.qc.ca/files/publications/98s-30.pdf
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    References listed on IDEAS

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    1. Barnett, A H, 1980. "The Pigouvian Tax Rule under Monopoly," American Economic Review, American Economic Association, vol. 70(5), pages 1037-1041, December.
    2. Van Long, N. & Soubeyran, A., 1997. "Cost Manipulation in an Asymmetric Oligopoly: The Taxation Problem," ASSET - Instituto De Economia Publica 173, ASSET (Association of Southern European Economic Theorists).
    3. Rauscher, Michael, 1994. "Environmental Regulation and the Location of Polluting Industries," CEPR Discussion Papers 1032, C.E.P.R. Discussion Papers.
    4. Kennedy Peter W., 1994. "Equilibrium Pollution Taxes in Open Economies with Imperfect Competition," Journal of Environmental Economics and Management, Elsevier, vol. 27(1), pages 49-63, July.
    5. Van Long, N. & Soubeyran, A., 1997. "Cost Manipulation in Oligopoly: A Duality Approach," ASSET - Instituto De Economia Publica 174, ASSET (Association of Southern European Economic Theorists).
    6. Benchekroun, Hassan & van Long, Ngo, 1998. "Efficiency inducing taxation for polluting oligopolists," Journal of Public Economics, Elsevier, vol. 70(2), pages 325-342, November.
    7. 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.
    8. Gérard Gaudet & Stephen W. Salant, 1991. "Uniqueness of Cournot Equilibrium: New Results From Old Methods," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 399-404.
    9. Buchanan, James M, 1969. "External Diseconomies, Corrective Taxes, and Market Structure," American Economic Review, American Economic Association, vol. 59(1), pages 174-177, March.
    10. Anderson, Kym, 1995. "The Entwining of Trade Policy with Environmental and Labour Standards," CEPR Discussion Papers 1158, C.E.P.R. Discussion Papers.
    11. Baumol,William J. & Oates,Wallace E., 1988. "The Theory of Environmental Policy," Cambridge Books, Cambridge University Press, number 9780521322249, April.
    12. Rauscher, Michael, 1994. "Environmental regulation and the location of polluting industries," Kiel Working Papers 639, Kiel Institute for the World Economy (IfW).
    13. Katsoulacos, Yannis & Xepapadeas, Anastasios, 1995. " Environmental Policy under Oligopoly with Endogenous Market Structure," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(3), pages 411-420, September.
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    Cited by:

    1. repec:bla:worlde:v:40:y:2017:i:8:p:1646-1666 is not listed on IDEAS
    2. Alain-Désiré Nimubona & Bernard Sinclair-Desgagné, 2013. "The Pigouvian Tax Rule in the Presence of an Eco-Industry," Economics Bulletin, AccessEcon, vol. 33(1), pages 747-752.
    3. Maia David & Bernard Sinclair-Desgagné, 2005. "Environmental Regulation and the Eco-Industry," Journal of Regulatory Economics, Springer, vol. 28(2), pages 141-155, September.
    4. Laixun Zhao & Tetsugen Haruyama, 2017. "Plant Location, Wind Direction and Pollution Policy Under Offshoring," The World Economy, Wiley Blackwell, vol. 40(8), pages 1646-1666, August.
    5. Ngo Van Long & Antoine Soubeyran, 2003. "Favoritism in Vertical Relationship: Input Prices and Access Quality," CIRANO Working Papers 2003s-14, CIRANO.
    6. Requate, Till, 2005. "Environmental Policy under Imperfect Competition: A Survey," Economics Working Papers 2005-12, Christian-Albrechts-University of Kiel, Department of Economics.

    More about this item

    Keywords

    Pollution; oligopoly; trade liberalization; Pollution; oligopole; libéralisation du commerce mondial;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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