Permit markets lead polluting …rms to purchase abatement goods from an eco-industry, which is often concentrated. This paper studies the consequences of imperfect competition in an ecoindustry on the equilibrium choices of the competitive polluting …rms. It then characterizes the second best pollution cap. By comparing this situation to a competitive one, we show that Cournot competition on the...

Will economic growth inevitably degrade the environment, throughout development? We present a household-level framework emphasising the trade-off between consumption that causes pollution and pollution-reducing abatement. Our model provides a simple explanation for upward-turning, non-monotonic paths of environmental quality during economic growth. Its innovation yields sufficient conditions th...

Production activities exert a negative impact on the environment through emissions of pollutants. Environmental policies aim at the implementation of abatement technologies to reduce these emissions. Cost-effectiveness analysis is often applied as a tool to find abatement strategies that yield a certain emission reduction at minimum direct abatement cost to the producer concerned. The strength ...

The implications of the propagation of uncertainty for the e ciency of stochastic water pollution control were analyzed. The empirical analysis focused on nitrogen pollution of the Baltic Sea from Swedish crop farms. A two moment model (mean and variance) of the distribution of coastal load was developed and integrated with an economic model of arable land-use choice. It was shown that uncertai...

I study the advantages of pollution permit markets over traditional standard regulations when the regulator has incomplete information on firms’ emissions and costs of production and abatement (e.g., air pollution in large cities). Because the regulator only observes each firm’s abatement technology but neither its emissions nor its output, there are cases in which standards can lead to lower e...

This paper analyzes the impact of environmental policy instruments on the choice of pollution control techniques. I ̄rst recast the existing theoretical model of pollution abatement technology choice. Previous studies have found that the cost savings to a ̄rm that adopts a technical innovation in pollution control are greater under a market-based instrument, such as an emissions tax or tradeabl...