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Domestic Effects of Environmental Policies with Transboundary Pollution

Published online by Cambridge University Press:  17 August 2016

Michel Cavagnac  and
Isabelle Péchoux
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Summary

We model environmental interaction among countries as a policy game where governments in each country use quotas or taxes as strategy variables. The environmental policy has a triple role to play: targeting domestic emissions, providing strategic advantages for domestic firms and targeting imported pollution. Using a multi-sector economic model, we show that, besides the well-known inefficiencies arising at the international level, the environmental policy may lead to purely domestic inefficiencies.

Résumé

Résumé

Dans le modèle proposé, la politique environnementale est une variable stratégique à la disposition des gouvernements. Ces derniers définissent leurs politiques de quotas ou de taxes avec un triple objectif : réguler les émissions polluantes nationales, conférer un avantage commercial aux firmes nationales et réguler la pollution importée. En utilisant un modèle multisectoriel, nous montrons que si une politique environnementale stratégique peut générer une inefficacité globale au plan international, elle peut également conduire à des inefficacités purement domestiques.

Keywords

Politique environnementalepollution transfrontalièremodèle multisectorielEnvironmental PolicyTransboundary PollutionMulti-sector model

JEL classification

Q28: Government Policy F18: Trade and Environment Q20: General
Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 76 , Issue 1 , 2010 , pp. 113 - 134
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 2010 

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Footnotes

*

Toulouse School of Economics (LERNA)

**

Toulouse School of Economics (ARQADE)

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