NOTA DI LAVORO 76 . 2009 Environmentalists ' Behaviour and Environmental Policies

In this partial equilibrium and static model, the impact of environmentalism on two countries’ environmental policies is presented. First, the only (indirect) way environmentalists influence the choice of pollution taxes is through a negative term in the welfare function in Home. It is defined as passive environmentalism (PE). Second, this article is a first attempt to consider domestic environmentalists lobbying a foreign government. It is defined as active environmentalism (AE). Our contribution is threefold. We emphasize first that the way environmentalists act is paramount to study the consequences of their actions. Passive or active environmentalism have very different impacts on environmental policies. Second, we show that lobbying activities can be counter-productive for environmentalists. Third, we characterize cases in which the presence of environmentalists has a non-ambiguous positive impact on welfare.