On The Strategic Effect of International Permits Trading on Local Pollution: Tha Case of Multiple Pollutants
EfD Authors:
We introduce a model of strategic environmental policy where two firms compete á la Cournot in a third market under the presence of multiple pollutants. Two types of pollutants are introduced, a local and a transboundary one. The regulator can only control local pollution as transboundary pollution is regulated internationally. The strategic effect present in the original literature is also replicated in this setup.