Date of This Version
April 2007
Abstract
Environmental policies are discussed when two countries differ in their ability to abate pollution. Northern eco-industries (the industry supplying abatement activities) are more efficient than Southern ones. Segmented environmental markets and a Northern monopoly yield identical second-best taxes in both countries. When markets are global, Southern countries underestimate the market power of eco-industries. Introducing competition creates positive (resp. negative) rent-shifting distortions in South (resp. North). Cooperation could reduce Northern pollution but has ambiguous consequences in South.
Recommended Citation
Canton, Joan, "Environmental Taxation and International Eco-Industries" (April 06, 2007). Fondazione Eni Enrico Mattei Working Papers. Paper 33.
https://services.bepress.com/feem/paper33