Strategic state-level environmental policy with asymmetric pollution spillovers

• 成果类型: Article
• 署名作者: Santore, R; Robison, HD; Klein, Y
• 署名单位: University of Tennessee System; University of Tennessee Knoxville; La Salle University; City University of New York (CUNY) System; Brooklyn College (CUNY); New York University
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/S0047-2727(00)00104-3
• 发表日期: 2001
• 页码: 199-224
• 关键词: electric utilities; tradable emissions permits

摘要

This paper examines the strategic behavior of state-level utility regulators in the context of the federal tradable emissions permits market when state-to-state pollution spillovers are asymmetric. Strategic behavior is possible because a state's environmental policy indirectly affects the price of permits and, therefore, abatement in other states. We show that the optimal pollution penalty is comprised of two parts: (i) a Pigouvian tax, adjusted for state-to-state spillovers; and (ii) an optimal tariff designed to improve the terms of trade in permits. Generally, abatement costs are not minimized and the outcome is Pareto inefficient, regardless of the size of the market. (C) 2001 Elsevier Science B.V. All rights reserved.