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Efficiency of Non-cooperative Emission Taxes in Perfectly Competitive Markets

  • Ecology
  • Geography
  • Political Science


With the current efforts to regulate the emissions of greenhouse gases and other cross border pollutants, the question of environmental federalism is as important as ever. By generalising the model presented by Oates and Schwab (1987, 1988), we show that the well established result within environmental federalism, that the government of a small country has no incentive to depart from the cooperative choice of environmental standards, does not hold for pollutants that have regional or global characteristics, as e.g. sulphur dioxide and carbon dioxide has.

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