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Partial privatization and environmental policies

Author

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  • Kato, Kazuhiko

Abstract

The paper compares emission tax and emission quota in a mixed duopoly when the partial privatization of a public firm is allowed. Furthermore, we consider the following two cases with regard to the objective of the public firm: (1) the public firm maximizes the weighted average of its profit and wefare and (2) the public firm maximizes the weighted average of its profit and the sum of consumer surplus and producer surplus. We show that emission tax is welfare superior to emission quota regardless of the degree of partial privatization in (1), whereas the former is inferior to the latter when the degree of partial privatization is high in (2).

Suggested Citation

  • Kato, Kazuhiko, 2010. "Partial privatization and environmental policies," MPRA Paper 27630, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:27630
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    File URL: https://mpra.ub.uni-muenchen.de/27630/1/MPRA_paper_27630.pdf
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    References listed on IDEAS

    as
    1. Shuichi Ohori, 2006. "Optimal Environmental Tax and Level of Privatization in an International Duopoly," Journal of Regulatory Economics, Springer, vol. 29(2), pages 225-233, March.
    2. Leonard F. S. Wang & Ya-chin Wang & Lihong Zhao, 2009. "Privatization and the Environment in a Mixed Duopoly with Pollution Abatement," Economics Bulletin, AccessEcon, vol. 29(4), pages 3112-3119.
    3. Beladi, Hamid & Chao, Chi-Chur, 2006. "Does privatization improve the environment?," Economics Letters, Elsevier, vol. 93(3), pages 343-347, December.
    4. Kazuhiko Kato, 2006. "Can Allowing to Trade Permits Enhance Welfare in Mixed Oligopoly?," Journal of Economics, Springer, vol. 88(3), pages 263-283, September.
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    Cited by:

    1. Kazuhiko Kato, 2013. "Optimal degree of privatization and the environmental problem," Journal of Economics, Springer, vol. 110(2), pages 165-180, October.

    More about this item

    Keywords

    environment; mixed duopoly; quota; tax;

    JEL classification:

    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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