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Environmental policy negotiations, transboundary pollution and lobby groups in small open economies


  • Persson, Lars

    () (Department of Economics, Umeå University)


This paper analyzes the consequences of lobby group activity for policy outcomes in economies with transboundary pollution and international environmental policies. In our framework, international environmental policies are characterized as pollution taxes determined in a negotiation between two countries. We find, among other things, that the presence of local lobbying tends to reduce the level of pollution taxes. We also find that an increase in the environmental concern (i.e. stronger preferences for a clean environment) may reduce the pollution tax in both countries. It is also possible that increased environmental concern in one country reduces the pollution tax in the other country.

Suggested Citation

  • Persson, Lars, 2007. "Environmental policy negotiations, transboundary pollution and lobby groups in small open economies," Umeå Economic Studies 722, Umeå University, Department of Economics, revised 01 Jul 2008.
  • Handle: RePEc:hhs:umnees:0722

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    More about this item


    transboundary pollution; lobbying; taxes; pollution; Nash bargain; negotiations; environmental policy;

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • F18 - International Economics - - Trade - - - Trade and Environment
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General

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