IDEAS home Printed from https://ideas.repec.org/p/ctl/louvre/2010014.html
   My bibliography  Save this paper

Domestic Effects of Environmental Poclicies with Transboundary Pollution

Author

Listed:
  • Michel Cavagnac

    (Toulouse School of Economics (LERNA))

  • Isabelle Péchoux

    (Toulouse School of Economics (ARQADE))

Abstract

We model environmental interaction among countries as a policy game where government in each country use quotas or taxes as a strategy variables. The environmental policy has a triple role to play : targeting domestic emission, providing strategic advantages for domestic firms and targeting imported pollution. Using a multi-sector economic model, we show that, besides the well-known inefficiencies arising at the international level, the environmental policy may lead to purely domestic inefficiencies.

Suggested Citation

  • Michel Cavagnac & Isabelle Péchoux, 2010. "Domestic Effects of Environmental Poclicies with Transboundary Pollution," Discussion Papers (REL - Recherches Economiques de Louvain) 2010014, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvre:2010014
    as

    Download full text from publisher

    File URL: http://sites.uclouvain.be/econ/DP/REL/2010014.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. McAusland, Carol, 2005. "Harmonizing tailpipe policy in symmetric countries: Improve the environment, improve welfare?," Journal of Environmental Economics and Management, Elsevier, vol. 50(2), pages 229-251, September.
    2. Michael Hoel, 2005. "The Triple Inefficiency of Uncoordinated Environmental Policies," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(1), pages 157-173, March.
    3. Jonathan Eaton & Gene M. Grossman, 1986. "Optimal Trade and Industrial Policy Under Oligopoly," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(2), pages 383-406.
    4. Cremer, Helmuth & Gahvari, Firouz, 2004. "Environmental taxation, tax competition, and harmonization," Journal of Urban Economics, Elsevier, vol. 55(1), pages 21-45, January.
    5. Kanbur, Ravi & Keen, Michael, 1991. "Tax competition and tax coordination : when countries differ in size," Policy Research Working Paper Series 738, The World Bank.
    6. Copeland, Brian R & Taylor, M Scott, 1995. "Trade and Transboundary Pollution," American Economic Review, American Economic Association, vol. 85(4), pages 716-737, September.
    7. Lai, Yu-Bong & Hu, Chia-Hsien, 2008. "Trade agreements, domestic environmental regulation, and transboundary pollution," Resource and Energy Economics, Elsevier, vol. 30(2), pages 209-228, May.
    8. 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.
    9. Kanbur, Ravi & Keen, Michael, 1993. "Jeux Sans Frontieres: Tax Competition and Tax Coordination When Countries Differ in Size," American Economic Review, American Economic Association, vol. 83(4), pages 877-892, September.
    10. Brander, James A. & Spencer, Barbara J., 1985. "Export subsidies and international market share rivalry," Journal of International Economics, Elsevier, vol. 18(1-2), pages 83-100, February.
    11. Rauscher, Michael, 1994. "On Ecological Dumping," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 822-840, Supplemen.
    12. Bruvoll, Annegrete & Faehn, Taran, 2006. "Transboundary effects of environmental policy: Markets and emission leakages," Ecological Economics, Elsevier, vol. 59(4), pages 499-510, October.
    13. Conrad Klaus, 1993. "Taxes and Subsidies for Pollution-Intensive Industries as Trade Policy," Journal of Environmental Economics and Management, Elsevier, vol. 25(2), pages 121-135, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Michel Cavagnac & Isabelle Péchoux, 2010. "Domestic Effects of Environmental Policies with Transboundary Pollution," Recherches économiques de Louvain, De Boeck Université, vol. 76(1), pages 113-134.
    2. Odd Rune Straume, 2006. "Product Market Integration and Environmental Policy Coordination in An International Duopoly," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 34(4), pages 535-563, August.
    3. Brian R. Copeland & M. Scott Taylor, 2004. "Trade, Growth, and the Environment," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 7-71, March.
    4. Jayadevappa, Ravishankar & Chhatre, Sumedha, 2000. "International trade and environmental quality: a survey," Ecological Economics, Elsevier, vol. 32(2), pages 175-194, February.
    5. Walz, Uwe & Wellisch, Dietmar, 1997. "Is free trade in the interest of exporting countries when there is ecological dumping?," Journal of Public Economics, Elsevier, vol. 66(2), pages 275-291, November.
    6. Bayindir-Upmann, Thorsten, 1998. "Interjurisdictional competition in emission taxes under imperfect competition of local firms," European Journal of Political Economy, Elsevier, vol. 14(2), pages 345-368, May.
    7. J. Neary, 2006. "International Trade and the Environment: Theoretical and Policy Linkages," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 33(1), pages 95-118, January.
    8. Adel Ben Youssef & Ludovic Ragni, 1998. "Politiques environnementales stratégiques et concurrence internationale : théorie et évidences," Revue d'Économie Industrielle, Programme National Persée, vol. 83(1), pages 81-98.
    9. Fabio Antoniou & Phoebe Koundouri & Nikos Tsakiris, 2010. "Information Disclosure Under Different Modes of Regulation," DEOS Working Papers 1015, Athens University of Economics and Business.
    10. Requate, Till, 2005. "Environmental Policy under Imperfect Competition: A Survey," Economics Working Papers 2005-12, Christian-Albrechts-University of Kiel, Department of Economics.
    11. Glebe, Thilo W. & Latacz-Lohmann, Uwe, 2004. "Agricultural Trade Liberalization And Strategic Environmental Policy: A Formal Analysis," 2004 Annual meeting, August 1-4, Denver, CO 20277, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Cremer, Helmuth & Gahvari, Firouz, 2006. "Which border taxes? Origin and destination regimes with fiscal competition in output and emission taxes," Journal of Public Economics, Elsevier, vol. 90(10-11), pages 2121-2142, November.
    13. Mads Greaker, 2004. "Industrial Competitiveness and Diffusion of New Pollution Abatement Technology - a new look at the Porter-hypothesis," Discussion Papers 371, Statistics Norway, Research Department.
    14. Stähler, Frank, 1998. "Competitiveness and environmental policies in strategic environmental policy models," Kiel Working Papers 858, Kiel Institute for the World Economy (IfW Kiel).
    15. Hamilton, Stephen F. & Requate, Till, 2004. "Vertical structure and strategic environmental trade policy," Journal of Environmental Economics and Management, Elsevier, vol. 47(2), pages 260-269, March.
    16. Gjermund Nese & Odd Straume, 2007. "Industry Concentration and Strategic Trade Policy in Successive Oligopoly," Journal of Industry, Competition and Trade, Springer, vol. 7(1), pages 31-52, March.
    17. Rauscher, Michael, 2001. "International trade, foreign investment, and the environment," Thuenen-Series of Applied Economic Theory 29, University of Rostock, Institute of Economics.
    18. Riveiro, Dolores, 2008. "Environmental policy and commercial policy: The strategic use of environmental regulation," Economic Modelling, Elsevier, vol. 25(6), pages 1183-1195, November.
    19. Niels Nannerup, 1998. "Strategic Environmental Policy Under Incomplete Information," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 11(1), pages 61-78, January.
    20. Klaus Conrad, 2001. "Voluntary Environmental Agreements vs. Emission Taxes in Strategic Trade Models," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 19(4), pages 361-381, August.

    More about this item

    Keywords

    Environmental policy; Transboundary Pollution; Multi-sector Model;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

    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:ctl:louvre:2010014. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Sebastien SCHILLINGS (email available below). General contact details of provider: https://edirc.repec.org/data/iruclbe.html .

    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.