Abstract
Pollution leakage is an important issue when countries address international environmental problems unilaterally. Leakage in this context is the increase in foreign emissions after a reduction in domestic emissions which results from international market interdependencies. In this paper,1 consider two markets,the first one for a polluting input (e.g. energy) and the second one for internationally mobile capital. Leakage is decomposed into its two components and the magnitudes of the effects are determined for a calibrated version of the model. Towards the end of the paper,normative questions related to the optimality of environmental policies are addressed.
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Rauscher, M. (2003). Environmental Policies in Open Economies and Leakage Problems. In: Böhringer, C., Löschel, A. (eds) Empirical Modeling of the Economy and the Environment. ZEW Economic Studies, vol 20. Physica, Heidelberg. https://doi.org/10.1007/978-3-642-57415-3_5
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DOI: https://doi.org/10.1007/978-3-642-57415-3_5
Publisher Name: Physica, Heidelberg
Print ISBN: 978-3-7908-0078-4
Online ISBN: 978-3-642-57415-3
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