The Political Economy of Strategic Environmental Policy When Waste Products are Tradable
In this paper we explore the implications of the possibility of â€œtrade in trashâ€ on optimal environmental policy and on the ramifications of a stronger or weaker environmental lobby across regions or nations. We have constructed a multiple stage game composed of a market stage and a policy stage. Waste might be exported to some less developed countries to get rid of any damages linked to waste treatment and disposal. Waste markets are imperfect where waste exporters exploit market power. We find that environmentalists do not necessarily succeed in pushing stricter environmental policy nor do industrialists in pushing weaker due to the fact that lobbying may be offset by terms of trade effects. As it happens, even stronger environmental sentiment in all nations need not lead to increased protection of the environment globally
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- Wilhelm Althammer & Wolfgang Bucholz, 1999. "Distorting Environmental Taxes: The Role of the Market Structure," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 219(3+4), pages 257-270, September.
- 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.
- Copeland, Brian R., 1991. "International trade in waste products in the presence of illegal disposal," Journal of Environmental Economics and Management, Elsevier, vol. 20(2), pages 143-162, March.
- R. Simpson, 1995. "Optimal pollution taxation in a Cournot duopoly," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 6(4), pages 359-369, December.
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