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- W3121377830 abstract "In this paper we examine an alternative policy scenario, where governments allow polluting firms to trade permits in a strategic environmental policy model. We demonstrate, among other things, that with no market power in the permits market, governments of the exporting firms do not have an incentive to under-regulate pollution in order to become more competitive. This strategic effect is reversed and leads to a welfare level closer to the cooperative one and strictly higher to that when permits are non-tradable. Allowing for market power in the permits market, the incentive to under-regulate pollution re-appears regardless of whether permits are tradable or not. With tradable permits, however, the incentive to under-regulate pollution is comparatively weaker relative to the case of non-tradable permits. This entails potential benefits for the exporting firms and countries since the prisoners’ dilemma is moderated." @default.
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- W3121377830 date "2010-01-01" @default.
- W3121377830 modified "2023-09-27" @default.
- W3121377830 title "Tradable permits vs ecological dumping." @default.
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- W3121377830 doi "https://doi.org/10.22004/ag.econ.59374" @default.
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