International environmental agreements: how the policy instrument affects equilibrium emissions and welfare

Alfred Endres, Michael Finus

Research output: Contribution to journalArticle

9 Citations (Scopus)

Abstract

Two countries, differing with respect to opportunity cost of abatement and environmental damage cost, negotiating joint emission reductions are considered. The bargaining process is analyzed in two policy regimes: Emission tax and transferable discharge permits. Emissions and welfare of the bargaining equilibria under these regimes are compared to each other and to the social optimum. The conditions for the superiority of the tax over the permit regime and vice versa are specified.

Original languageEnglish
Pages (from-to)527-550
Number of pages24
JournalJournal of Institutional and Theoretical Economics
Volume155
Issue number3
Publication statusPublished - 1999

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Policy instruments
International environmental agreements
Opportunity cost
Social optimum
Environmental damage
Emission reduction
Tax
Emission taxes
Abatement
Negotiating
Costs

Cite this

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abstract = "Two countries, differing with respect to opportunity cost of abatement and environmental damage cost, negotiating joint emission reductions are considered. The bargaining process is analyzed in two policy regimes: Emission tax and transferable discharge permits. Emissions and welfare of the bargaining equilibria under these regimes are compared to each other and to the social optimum. The conditions for the superiority of the tax over the permit regime and vice versa are specified.",
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EP - 550

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