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To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.euroecorev.2005.02.002 Byline: Daan P. van Soest (a), John A. List (b)(c), Tim Jeppesen (d) Keywords: Cross-country environmental regulation; Interjurisdictional competition Abstract: Empirical tests of the relationship between international competitiveness and the severity of environmental regulations are hampered by the lack of pollution abatement cost data for non-U.S. countries. The theory of the firm suggests that environmental stringency can be measured by the difference between a polluting input's shadow price and its market price. We make a first attempt at quantifying such a measure for two industries located in nine European OECD countries. Overall, we provide (i) a new approach to measure cross-country regulatory differences in that we use a theoretically attractive measure of industry-specific private compliance cost, and (ii) empirical estimates that are an attractive tool for researchers and policymakers who are interested in examining how economic activity is influenced by compliance costs. Author Affiliation: (a) Department of Economics and CentER, Tilburg University, P.O. Box 90153, 5000 LE, Tilburg, The Netherlands (b) University of Maryland, 2200 Symons Hall, College Park, MD 20742-5535, USA (c) NBER, Cambridge, MA, USA (d) Kommunernes Revision, Oestre Stationsvej 43, 5000 Odense C, Denmark Article History: Received 12 February 2004; Accepted 13 February 2005

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.reseneeco.2004.11.002 Byline: Daan P. van Soest Keywords: Environmental taxation; Command-and-control instruments; Dynamic efficiency; Stochasticity Abstract: One of the main considerations in designing environmental policy is the impact of policy instruments on the timing of firms' investment decisions with respect to energy-saving technologies. This paper analyzes the impact of environmental taxes and quotas on the timing of adoption when (i) the rate at which new, improved energy-efficient technologies become available, is uncertain, and (ii) the investment decision is (at least partially) irreversible. We find that neither policy instrument is unambiguously preferred to the other when it comes to stimulating early adoption of new technologies. Author Affiliation: Department of Economics and Center, Tilburg University, P.O. Box 90153, 5000 LE Tilburg, The Netherlands Article History: Received 11 April 2003; Revised 9 July 2004; Accepted 2 November 2004

We propose an alternative explanation for the inverted U-shape relationship between income and environmental degradation. In developing countries, production and consumption patterns of (rural) households are the main cause of environmental damage. With a conventional household model, we demonstrate that the so-called Environmental Kuznets Curve may arise when the restrictive assumption of a set of perfect markets for factors and commodities is relaxed. Depending on the criterion or indicator that is used to represent environmental pressure, however, we demonstrate that the reverse may also hold. This finding highlights the importance of selecting the appropriate dependent variable in regression analyses. [C] 2001 Elsevier Science B.V. All rights reserved. JEL classification: O13; Q12 Keywords: Natural capital; Poverty and environmental pressure; Trade; Missing markets; Income effect