Strategic environmental policy and international market share rivalry under differentiated Bertrand oligopoly

2020 ◽  
Author(s):  
By Harvey E Lapan ◽  
Shiva Sikdar
Keyword(s):  
International Market ◽  
Environmental Policies ◽  
Tradable Permits ◽  
Differentiated Products ◽  
Emission Taxes ◽  
Pollution Damage ◽  
Strategic Environmental Policy ◽  
Marginal Damage ◽  
Bertrand Oligopoly ◽  
Pigovian Tax

Abstract We analyse strategic environmental policies under international Bertrand oligopoly when firms in different industries, located in different countries, produce differentiated products. Under cooperation, emission prices always exceed the joint marginal damage from pollution. Under non-cooperation, internationally nontradable and tradable emission permit prices are always higher than the domestic marginal damage from emissions (the Pigovian tax); emission taxes can also exceed the Pigovian tax. The non-cooperative emission prices under all instruments can exceed the joint pollution damage. Internationally tradable permits generate outcomes closest to cooperation — they result in the lowest pollution and the highest welfare among all instruments under non-cooperation. Pollution is the highest and welfare the lowest with taxes. Our results provide support for allowing international trade in emission permits even when governments choose their permit levels non-cooperatively.

scholarly journals Efficiency without Optimality: A Pragmatic Compromise for Environmental Policies in the Late 1960s

2021 ◽  
Author(s):  
Nathalie Berta
Keyword(s):  
Cost Effective ◽  
Environmental Policies ◽  
Early History ◽  
Political Decision ◽  
Contentious Issue ◽  
Pollution Damage ◽  
History Of ◽  
Market Approach ◽  
Pigovian Tax

In the late 1960s, new environmental policies emerged which attempted to reach predetermined pollution standards in a cost-effective way: i.e., the ‘standard-and-tax’ approach proposed by William J. Baumol and Wallace E. Oates and the permits market approach proposed by John Dales. This paper describes the early history of the two approaches, and compares them. Although they flow from different traditions, namely Pigovian versus Coasean, and are often contrasted in the literature, these cost-effective solutions emerged at the same time and for the same reasons. First, they both tried to promote incentives-based policies against traditional regulations; second, they criticized the optimal Pigovian tax, which raised the contentious issue of measuring pollution damage. More broadly, they emerged as a kind of pragmatic compromise, fed by a common attempt to move toward more practical policies: reaching efficiency without optimality, while relying on standards whose setting is a matter for political decision.

EFFICIENCY WITHOUT OPTIMALITY: ENVIRONMENTAL POLICIES AND POLLUTION PRICING IN THE LATE 1960S

2020 ◽  
Vol 42 (4) ◽  
pp. 539-562
Author(s):  
Nathalie Berta
Keyword(s):  
Cost Effective ◽  
Environmental Policies ◽  
Early History ◽  
Political Decision ◽  
Contentious Issue ◽  
Pollution Damage ◽  
History Of ◽  
Market Approach ◽  
Pigovian Tax

In the late 1960s, new environmental policies emerged that attempted to reach predetermined pollution standards in a cost-effective way: i.e., the “standard-and-tax” approach proposed by William J. Baumol and Wallace E. Oates, and the permits market approach proposed by John Dales. This paper describes the early history of the two approaches, and compares them. Although today they refer to different traditions, namely Pigovian versus Coasean, and are often contrasted in the literature, these cost-effective solutions emerged at the same time and for the same reasons. First, they both tried to promote incentives-based policies against traditional regulations; second, they criticized the optimal Pigovian tax, which raised the contentious issue of measuring pollution damage. More broadly, they emerged as a kind of pragmatic compromise, fed by a common attempt to move toward more practical policies: reaching efficiency without optimality, while relying on standards whose setting is a matter for political decision.

scholarly journals Carbon Tariff vs. Emission Cap of North–South Countries in Response to Manufacturer’s Production

2020 ◽  
Vol 12 (4) ◽  
pp. 1443
Author(s):  
Rui Dai ◽  
Jianxiong Zhang ◽  
Guowei Liu
Keyword(s):  
Environmental Policies ◽  
Well Being ◽  
Differentiated Products ◽  
Severe Damage ◽  
The South ◽  
Developed Country ◽  
The North ◽  
Stage Game ◽  
Pareto Improving ◽  
Carbon Tariff

Economy prosperity has concurrently caused severe emission damages worldwide, which calls for strong abatement efforts from both nations and manufacturers. In this paper, we establish a two-stage game to investigate the policy selections of a foreign developed country (North) and a domestic developing country (South), and the response of a Southern manufacturer. The welfare-maximizing governments in the two countries participate in an announcement game of environmental policies where the South decides on whether or not to enforce an emission cap and the North chooses either a carbon tariff or no policy, after which the profit-seeking manufacturer reacts to make production strategies and distribute differentiated products to the two countries. Our analysis shows that under an emission cap, the manufacturer shrinks product quantities in both markets, cuts emissions, and suffers profit losses. A carbon tariff has similar impacts on the manufacturer except for unaffected domestic sales. In addition, equilibrium policy selections for the two governments depend on the degree of emission damage in the South: A moderate level of damage generates an equilibrium in the scenario of the unilateral tariff policy where the Northern welfare peaks and the Southern well-being is not the worst; a severe damage leads to a prisoner’s dilemma, since the two governments would arrive at an equilibrium in the bilateral-policy scenario, but it is dominated by a no-policy scheme. What is more, we find that a negotiation between the two governments is able to help them out of the dilemma and achieve a Pareto-improving outcome.

scholarly journals CHALLENGES TO THE BRAZILIAN AGROFOOD INDUSTRY IN THE GLOBAL MARKET

2001 ◽  
Vol 27 ◽  
Author(s):  
Nilson M. De Paula
Keyword(s):  
International Market ◽  
Global Market ◽  
Differentiated Products ◽  
Trade Relation ◽  
Economic Relations ◽  
The Core ◽  
International Economic Relations ◽  
External Flows ◽  
Trade And Investment ◽  
Opening Up

A globalização da economia mundial vem sendo amplamente discutida, revolvendo um debate tanto teórico quanto ideológico a respeito dessa multifacetada transformação, com a qual todos os países vem se envolvendo. Independente dos rumos dessa discussão, a questão da competitividade tem se tornado essencial nas relações econômicas internacionais da última década, quando a maioria dos países começaram a promover uma abertura tanto aos fluxos de investimento quanto de comércio. Abstract Globalization has been deeply discussed revolving around a theoretical and ideological contention concerning this many-sided transformation with which, in one way or another, all countries have become entangled. Whatever the course of the discussion, competitiveness has become the key question in the international economic relations of the last decade, when most countries started opening up their economies to the external flows of trade and investment. The core of this analysis indicates the challenges facing Brazil in the international market when differentiated products appear to dominate trade relation. The discussion explores the extent to which foreign direct investment can change the conditions under which the country can boost its international competitiveness. As it will be argued here, the process of opening up the Brazilian economy in the 1990s has so far only consolidated the country’s position as a commodity exporter, whereas the mainstream of the international market has consisted of processed and differentiated products.

L'entreprise, Sujet Et Objet De Consideration Considération Morale?

2003 ◽  
Vol 42 (3) ◽  
pp. 431-448
Author(s):  
Alexia Leseur
Keyword(s):  
Global Warming ◽  
Environmental Policies ◽  
Tradable Permits

Drawing on the example of environmental policies aiming at reducing the risk of global warming due to anthropic emissions, and especially on debates about the equity of the distribution of tradable permits, the article reflects on the notion of moral entity. Since it appears impossible to refer to individuals when deciding upon the equity of this distribution, another approach is explored, in which the firm may be considered as a moral entity. Three types of arguments, referring to law, philosophy, and positive aspects, support this approach.

scholarly journals An Experimental Analysis of the Effects of Imperfect Compliance on Technology Adoption

2021 ◽  
Author(s):  
Lidia Vidal-Meliá ◽  
Carmen Arguedas ◽  
Eva Camacho-Cuena ◽  
José Luis Zofío
Keyword(s):  
Experimental Investigation ◽  
Technology Adoption ◽  
Tax Evasion ◽  
Experimental Analysis ◽  
Emission Control ◽  
Tradable Permits ◽  
Emission Taxes ◽  
Theoretical Predictions

AbstractWe present the results of an experimental investigation on incentives to adopt cleaner abatement technologies in the presence of imperfect compliance. We consider two emission control instruments—emission taxes and tradable permits—as well as different combinations of the inspection probability and fine for non-compliance, which can result in full or weak enforcement scenarios. We review and qualify existing theoretical predictions in several ways and find the main result is that allowing for weak enforcement causes tax evasion, reductions in permit prices and lower adoption rates of cleaner abatement technologies. As a result, there are increases in aggregate emissions. Finally, treatments with tradable permits under weak enforcement encounter insufficient trading.

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