Abstract

SANDOVAL BRAVO, Salvador. Integrated markets and environmental control policies. EconoQuantum [online]. 2019, vol.16, n.1, pp.83-102. ISSN 2007-9869.  https://doi.org/10.18381/eq.v16i1.7161.

This article develops a partial equilibrium model based on integrated markets conditions in a bilateral trade of a homogeneous good. Two pollutants-producing heterogeneous and monopolistic firms are assumed to be located in their respective countries, where they compete under an oligopolistic scheme. Thus, governments should work out strategic environmental policies so as to really warrant a healthy and clean environment. As the same time, they should take into account both the benefits of enterprises and consumers, as well as their own revenues by means of the collection of pollution taxes from firms. The main accomplished findings aim at concluding that if the pollutant marginal cost is very high, governments should fix a high pollution tax; otherwise, a zero tax on pollution emissions should be fixed whether the marginal cost of pollution does not show very significant.

Keywords : Integrated markets; pollution taxes; environmental policies.

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