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Efficiency of Uniform Standards for Transboundary Pollution Problems : a note

Listed author(s):
  • Basak Bayramoglu

    ()

    (PSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics)

  • Jean-François Jacques

    ()

    (EQUIPE UNIVERSITAIRE DE RECHERCHE "INSTITUTIONS : COORDINATION, ORGANISATION" - EURIsCO - Université Paris-Dauphine)

This note proposes an example which contradicts the idea that similar countries will negotiate an agreement on a uniform standard. It shows that strictly identical countries may have an interest in reducing their emissions differently, and not in a uniform way. This result relies on the existence of fixed costs in the abatement technology. Identical countries could be better off by signing an agreement on differentiated standards in order to exploit increasing returns to scale in the abatement activities. More specifically, one of the countries abates for both, and pays for the fixed cost of investment. In return, it is compensated by monetary transfers for this effort. We show that the level of fixed cost must be sufficiently high in this case.

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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00159575.

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Date of creation: May 2007
Publication status: Published in Documents de travail du Centre d'Economie de la Sorbonne 2007.31 - ISSN : 1955-611X. 2007
Handle: RePEc:hal:cesptp:halshs-00159575
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00159575
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