Suchergebnisse

AbstractWe investigate a novel way to encourage separation between firms, causing local pollution, and their victims (households): payments from households to distant polluting firms. These payments do not require monitoring of firms' emissions or their abatement costs. In our model, households and firms can choose from two locations (A and B, with A larger than B). Households incur environmental damage from firms in the same location. Under laissez faire, payments from households in one location (say A) to firms in the other location (say B) will prompt firms to move from A to B and to stay there, thus reducing damage to households in A. The maximum that households are willing to pay temporarily is the amount that currently makes them indifferent between A and B. The payments make A less attractive to firms as well as to households. The unique positive-payment equilibrium implements the global welfare optimum where laissez faire does not. We examine from which starting points this payment equilibrium can be reached.

We set up a two-stage game with sequential moves by one altruist and n selfish agents. The Samaritan's dilemma (rotten kid theorem) states that the altruist can only reach her first best when the selfish agents move after (before) the altruist. We find that in general, the altruist can reach her first best when she moves first if and only if a selfish agent's action marginally affects only his own payoff. The altruist can reach her first best when she moves last if and only if a selfish agent cannot manipulate the price of his own payoff.

In this comment on Schleich (1999), I point out that in the political equilibrium with organized polluters, environmental quality cannot exceed the socially optimal level. I also derive the general condition under which trade policy yields more environmental protection than domestic policy. 1 Figure, 3 References. Adapted from the source document.

We examine the effects of trade liberalization in environmental goods in a model with one domestic downstream polluting firm and two upstream firms (one domestic, one foreign). The upstream firms offer their technologies to the downstream firm at a flat fee. The domestic government sets the emission tax rate after the outcome of R&D is known. The effect of liberalization on the domestic upstream firm's R&D incentive is ambiguous. Liberalization usually results in cleaner production, which allows the country to reach higher welfare. However this increase in welfare is typically achieved at the expense of the environment (a backfire effect).