Pricing Pollution

Arbeitspapier

I examine a policy-making game among countries that must choose both a policy instrument (e.g., a tax or a quota) and its intensity (i.e., the tax rate or the quota level) to price pollution. When countries price pollution non-cooperatively, they not only set the intensity inefficiently, they are also likely to adopt Pigouvian fees, despite quotas being better from a welfare perspective. Adopting a Pigouvian fee to address a multi-country externality generates a risk externality, and non-cooperatively chosen quotas can generate higher social welfare than maximum social welfare Pigouvian fees can deliver.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 8269

Classification and Topics

• Classification: Wirtschaft ; Noncooperative Games ; Criteria for Decision-Making under Risk and Uncertainty ; International Relations, National Security, and International Political Economy: General ; Taxation and Subsidies: Efficiency; Optimal Taxation ; Nonrenewable Resources and Conservation: Government Policy ; Environmental Economics: Government Policy
• Subject: environmental policy ; global pollution ; international relations

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Mideksa, Torben K.
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/217020
• Last update: 10.03.2025, 11:43 AM CET