Sonia Schwartz
Country: France
Affiliation: Professor in Economics, Centre d'Etudes et de Recherches sur le Développement International, Université d’Auvergne
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About polluting eco-industries: optimal provision of abatement goods and Pigouvian fees
Environmental Economics Volume 8, 2017 Issue #3 pp. 46-61
Views: 973 Downloads: 166 TO CITE АНОТАЦІЯIn this article, the authors introduce a polluting eco-industry. Depending on the level of damage, there are two optimal equilibria. If the damage is low, one generalizes the usual results of the economic literature to the polluting eco-industry: the dirty firm partially abates their emissions, only efficient eco-industry firms produce and the abatement level increases with the damage. However, very specific results are obtained if the damage is high. In this case, not all efficient eco-industry firms produce. The abatement level and the number of active eco-industry firms both decrease as the damage increases. The authors finally show that a well-designed Pigouvian tax implements these equilibria in a competitive economy.