Umeå Economic Studies, Department of Economics, Umeå University
No 722:
Environmental policy negotiations, transboundary pollution and lobby groups in small open economies
Lars Persson ()
Abstract: This paper analyzes the consequences of lobby group
activity for policy outcomes in economies with transboundary pollution and
international environmental policies. In our framework, international
environmental policies are characterized as pollution taxes determined in a
negotiation between two countries. We find, among other things, that the
presence of local lobbying tends to reduce the level of pollution taxes. We
also find that an increase in the environmental concern (i.e. stronger
preferences for a clean environment) may reduce the pollution tax in both
countries. It is also possible that increased environmental concern in one
country reduces the pollution tax in the other country.
Keywords: transboundary pollution; lobbying; taxes; pollution; Nash bargain; negotiations; environmental policy; (follow links to similar papers)
JEL-Codes: D62; F18; H21; H23; H70; (follow links to similar papers)
29 pages, November 2, 2007, Revised July 1, 2008
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