We modify the vertically differentiated duopoly model by André et al. (2009) replacing Bertrand with Cournot behaviour to show that firms may spontaneously adopt a green technology even in the complete absence of any form of regulation. JEL codes: L13, L51, Q55, Q58

This project links administrative census microdata to spatially continuous measures of particulate pollution (PM2.5) first document and then decompose the key drivers convergence in black-white exposure differences. We use quantile regression show that a significant portion Black-White is attributable differential impacts Clean Air Act (CAA) Black White communities. Areas with larger population...

We construct a strategic trade model of an international duopoly, whereby production by exporting firms generates a local pollutant. Governments use environmental policies, i.e., an emissions standard or a tax, to control pollution and for rent shifting purposes. Contrary to their firm, however, governments are unable to perfectly foresee the actual level of demand, the cost of abatement and th...

While theory suggests that information programs may correct market failures and improve welfare, the empirical impacts of these policies remain undetermined. We show that mandatory disclosure programs in the electricity industry achieve stated policy goals. We find that the proportion of fossil fuels decreases, and the proportion of clean fuels increases in response to disclosure programs. Howe...

This article surveys the growing theoretical literature on the motives for and welfare effectsof environmental corporate social responsibility (CSR). We show how both market andnonmarket forces are making environmental CSR profitable, and also discuss altruistic CSR.In particular, nongovernmental organizations strongly influence CSR activities, through bothpublic and private pol...

When politicians negotiate in international climate conventions they may suffer from incomplete information about each other’s preferences about reaching an agreement. As is known, this may cause failure to reach an efficient cooperative agreement. We study the role of the clean development mechanism (CDM) for the likelihood of such failure. The CDM has been introduced in the context of the Kyo...

Ten years after the initial Climate Change Convention from Rio in 1992, the developed world is likely to ratify the Kyoto Protocol which has been celebrated as a milestone in climate protection. Standard economic theory, however, casts doubt that Kyoto will go beyond symbolic policy. In this paper we show that the final concretion of the Kyoto Protocol obeys the theoretical prediction: Kyoto mo...

This study develops a theoretical general equilibrium model to examine optimal externality tax policy in the presence of externalities linked to one another through markets rather than technical production relationships. Analytical results reveal that the second-best externality tax rate may be greater or less than the first-best rate, depending largely on the elasticity of substitution between...

Are prices or quantities the best regulatory instrument to align private actions with public interests in the presence of externalities? We add another dimension to this ongoing debate by experimentally analyzing the interaction between instrument choice and intrinsic motivation of regulated agents. The response of subjects facing a trade-off between real CO2 emissions and private monetary payo...

It seems to be a not uncommonly held view that intertemporal banking and borrowing of tradeable permits might tilt the ‘prices vs. quantities’debate towards looking relatively more favorably upon time-flexible quantities. The present paper shows that this view is incorrect for a natural dynamic extension of the original ‘prices vs. quantities’ information structure, which here allows the firms ...