摘要:
Policy makers, industrialists and environmentalists express concern that the imposition of tough environmental policies in some countries displaces production, and hence pollution, to countries which impose less tough environmental policies. Yet empirical studies of such impacts suggest they are small. However, these findings are derived from models in which international trade is modelled as being perfectly competitive. In this paper I model trade as imperfectly competitive with scope for strategic behavior by producers, in this case investment in capital. I show that the choice of environmental policy instrument can have a marked impact on the incentives for producers to act strategically, with environmental standards significantly reducing the incentives for strategic overinvestment relative to environmental taxes or no environmental policy at all. Whether welfare is higher using standards or taxes depends on whether producing countries are also significant consumers of the polluting product, and on whether all producing governments act to reduce emissions or only some subset of governments. To assess the quantitative significance of these theoretical results I conduct policy simulations on a calibrated model of the world fertilizer industry. These simulations show that the impact of environmental policy on strategic behaviour can be large.
摘要:
In this paper, we investigate how a country's choice of environmental policy instrument affects the international competitiveness of its firms. We show that in a Cournot-Nash equilibrium, the total market share of firms regulated through tradeable emission permits increases relative to that of the firms operating under command and control due to better allocation of total abatement among the firms in the country. Our work suggests that free trade situations should not only result in similar environmental standards but also in similar regulatory regimes. It may come as no surprise that the environmental authorities in Canada are seriously considering following the United States in instituting a tradeable emission permits mechanism.