Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/110778 
Year of Publication: 
2015
Series/Report no.: 
CESifo Working Paper No. 5278
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We build a two regions general equilibrium model with cross-border pollution and either international or only inter-regional capital mobility. To control pollution each region uses public pollution abatement and issues either intra-regionally or inter-regionally tradable emission permits. We analyze the non-cooperative (decentralized) and cooperative (centralized) equilibrium level of emission permits and we examine when and how cross-border pollution and the type of capital mobility affect these equilibrium policies. We provide the welfare ranking of the policies in the various cases and we investigate under what conditions the decentralized and centralized equilibrium policies are equally efficient.
Subjects: 
cross-border pollution
tradable emission permits
international capital mobility
public pollution abatement
JEL: 
F18
F21
H21
Document Type: 
Working Paper
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