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Marchés internationaux de droits à polluer et taxes locales sur les biens polluants

Author

Listed:
  • Julien Daubanes

    () (University of Geneva)

  • Pierre Lasserre

    (Université de Québec à Montréal)

Abstract

The interest of international markets for pollution rights lies in their potential to achieve a pollution reduction objective in an efficient manner. Unfortunately, the tendency of participating countries to tax polluting goods locally undermines this potential. We propose a model to examine the interest of countries participating in a market for rights to pollute in taxing the good that generates pollution. In particular, this interest depends on the initial distribution of rights among participating countries. We show how rights should be allocated to the different participating countries in order to ensure market efficiency. These optimal allocations require that a sufficiently large fraction of rights be distributed free of charge rather than auctioned.

Suggested Citation

  • Julien Daubanes & Pierre Lasserre, 2018. "Marchés internationaux de droits à polluer et taxes locales sur les biens polluants," Working Papers 2018.18, FAERE - French Association of Environmental and Resource Economists.
  • Handle: RePEc:fae:wpaper:2018.18
    as

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    File URL: http://faere.fr/pub/WorkingPapers/Daubanes_Lasserre_FAERE_WP2018.18.pdf
    File Function: First version, 2018
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    References listed on IDEAS

    as
    1. Matti Liski & Juan‐Pablo Montero, 2011. "Market Power in an Exhaustible Resource Market: The Case of Storable Pollution Permits," Economic Journal, Royal Economic Society, vol. 121(551), pages 116-144, March.
    2. Santore, Rudy & Robison, H. David & Klein, Yehuda, 2001. "Strategic state-level environmental policy with asymmetric pollution spillovers," Journal of Public Economics, Elsevier, vol. 80(2), pages 199-224, May.
    3. Hikaru Ogawa & David E. Wildasin, 2009. "Think Locally, Act Locally: Spillovers, Spillbacks, and Efficient Decentralized Policymaking," American Economic Review, American Economic Association, vol. 99(4), pages 1206-1217, September.
    4. Yu-Bong Lai, 2008. "Auctions or grandfathering: the political economy of tradable emission permits," Public Choice, Springer, vol. 136(1), pages 181-200, July.
    5. MacKenzie, Ian A. & Ohndorf, Markus, 2012. "Cap-and-trade, taxes, and distributional conflict," Journal of Environmental Economics and Management, Elsevier, vol. 63(1), pages 51-65.
    6. Bergstrom, Theodore C, 1982. "On Capturing Oil Rents with a National Excise Tax," American Economic Review, American Economic Association, vol. 72(1), pages 194-201, March.
    7. Harrie A. A Verbon & Cees A. Withagen, 2010. "Do Permit Allocations Matter?," CESifo Working Paper Series 3236, CESifo Group Munich.
    8. Robert W. Hahn, 1984. "Market Power and Transferable Property Rights," The Quarterly Journal of Economics, Oxford University Press, vol. 99(4), pages 753-765.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    International cap and trade; local taxes; optimum tariff; optimal allocation of pollution rights;

    JEL classification:

    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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