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Title:Second best environmental policies under uncertainty PDF Logo
Authors:Antoniou, Fabio
Hatzipanayotou, Panos
Koundouri, Phoebe
Issue Date:2010
Series/Report no.:Nota di lavoro // Fondazione Eni Enrico Mattei: Sustainable Development 2010,3
Abstract:We construct a strategic trade model of an international duopoly, whereby production by exporting firms generates a local pollutant. Governments use environmental policies, i.e., an emissions standard or a tax, to control pollution and for rent shifting purposes. Contrary to their firm, however, governments are unable to perfectly foresee the actual level of demand, the cost of abatement and the damage caused from pollution. Under these modes of uncertainty we derive sufficient conditions under which the governments optimally choose an emissions tax over an emissions standard.
Subjects:Strategic Environmental Policy
Pollution
Choice of Policy Instrument
Uncertainty
JEL:F12
F18
Q58
Document Type:Working Paper
Appears in Collections:FEEM Working Papers, Fondazione Eni Enrico Mattei

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