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Optimal Environmental Policy Differentials under Emissions Constraints

Authors :
Florax, R.J.G.M.
Mulatu, A.
Withagen, C.A.A.M.
Spatial Economics
School of Business and Economics
Mathematics and Computer Science
Research on miscellaneous topics in mathematics, not included in one of the research schools
Publication Year :
2003
Publisher :
Tinbergen Institute, 2003.

Abstract

Is there a case to be made for preferential treatment of the exposed sector in an economy when compliance to an aggregate emissions constraint induced by an international environmental agreement is mandatory? This question is being debated in many countries, including The Netherlands, in the context of the implementation of the kyoto protocol. We address this issue in a general equilibrium framework in this paper, and theoretically cover several market structures, including perfect competition, oligopoly and large country case. Our main finding is that in many circumstances preferential treatment is not warranted from the point of view of maximizing social welfare.

Details

Language :
English
Database :
OpenAIRE
Accession number :
edsair.dedup.wf.001..64da138474ba0b6ca91c09da287a4c53