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Environmental Taxes, Abatement Effort and Green Trade Unions in an Oligopoly Market

Author

Listed:
  • Elias Asproudis

    (Swansea University, School of Social Sciences, Department of Economics, UK)

  • Eleftherios Filippiadis

    (Department of Economics, University of Macedonia, Greece)

Abstract

This paper examines how environmental taxes, abatement effort, and green trade unions interact within a differentiated duopoly under decentralised and centralised wage setting structures. We show that trade union environmental awareness acts as a substitute for environmental taxation: as unions internalize local damages in wage negotiations, the regulator optimally chooses a lower emissions tax. Centralised wage bargaining leads to higher wages and lower emissions, while decentralised bargaining yields higher output, profits, and social welfare. From a policy perspective, we argue that incorporating green trade unions’ environmental preferences into environmental governance can improve efficiency of the environmental policy taxation.

Suggested Citation

  • Elias Asproudis & Eleftherios Filippiadis, 2026. "Environmental Taxes, Abatement Effort and Green Trade Unions in an Oligopoly Market," Discussion Paper Series 2026_03, Department of Economics, University of Macedonia, revised Mar 2026.
    • Handle: RePEc:mcd:mcddps:2026_03
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    Keywords

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    JEL classification:

    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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