Using a model of nonlinear decay of the stock pollutant, and starting from the same initial conditions, the paper shows that an optimal tax that corrects for both stock and ßow externalities may result in a lower tax, fewer cumulative emissions (less decay) and higher output at the steady state than a corrective tax that ignores the ßow externality. The “more is less” result emphasizes that set...

In this paper we investigate the relationship between economic growth and industrial pollution emissions in China using data for 112 major cities between 2001 and 2004. Using disaggregated data we separate FDI inflows from Hong Kong, Macao and Taiwan from those of other foreign economies. We examine four industrial water pollution indicators (wastewater, chemical oxygen demand, hexavalent chrom...

This paper provides an overview of the treatment of technological change in economic models of environmental policy. Numerous economic modeling studies have confirmed the sensitivity of midand long-run climate change mitigation cost and benefit projections to assumptions about technology costs. In general, technical progress is considered to be a noneconomic, exogenous variable in global climat...

We analyze important forces that hamper the formation of successful self-enforcing agreements to mitigate global warming. The analysis combines two modules: a) a computable general equilibrium model that captures the feedback between the economy, environmental damages and the climate system and b) a game theoretic model that determines stable coalitions in the presence of free-riding incentives...

We analyze important forces that hamper the formation of successful self-enforcing agreements to mitigate global warming. The analysis combines two modules: a) an integrated assessment model that captures the feedback between the economy, environmental damages and the climate system and b) a game theoretic model that determines stable coalitions in the presence of free-riding incentives. We con...

A growing body of research points to the fact that capital markets react to environmental news and thus create incentives for pollution control in both developed and emerging market economies. In this paper we conduct an event study to examine the impact of environmental rating of large pulp and paper, auto and chlor alkali firms on their stock prices. We find that the market generally penalize...

In this paper we present a methodology within the multi-criteria paradigm to assist policy decision-making on water management for irrigation. In order to predict farmers’ response to policy changes a separate multi-attribute utility function for each homogeneous group, attained applying cluster analysis, is elicited. The results of several empirical applications of this methodology suggest an ...

One hundred and three estimates of the marginal damage costs of carbon dioxide emissions were gathered from 28 published studies and combined to form a probability density function. The uncertainty is strongly right-skewed. If all studies are combined, the mode is $2/tC, the median $14/tC, the mean $93/tC, and the 95 percentile $350/tC. Studies with a lower discount rate have higher estimates a...

Over the last three decades, ambient concentrations of sulfur dioxide (SO2) air pollution have declined by approximately 80%. This paper tests whether the 1970 Clean Air Act and its subsequent amendments caused this decline. The centerpiece of this legislation is the annual assignment of all counties to SO2 nonattainment or attainment categories. Polluters face stricter regulations in nonattain...

This paper examines and quantifies the complex linkages between industrial activity, environmental regulations and air pollution in China. We utilize a little used dataset of Chinese industry specific emissions for a variety of pollutants between 1996 and 2003. Our analysis allows us to investigate the role played by different determinants of emissions intensity. We find pollution intensity to ...