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Issue Q2-3 2011  
Price versus quantities in the coordination of international environmental policy  
Anna Creti
Maria-Eugenia Sanin
This work contributes to the debate on coordination of international environmental policy by revisiting Mandell (2008)’s result who, on the ground of Weitzman (1974)’s model, is in favor of a decentralized regulation at the sectorial or country level instead of a unified one. We show that whether different countries should optimally set their own environmental regulation instead of entering a common framework crucially depends on the combination between firms’ heterogeneity in abatement costs, size of the regulated sectors at the national level, as well as uncertainty on aggregate marginal abatement benefits and costs. Abstract

Regulation ; Uncertainty ; Emissions Tax ; Tradable Permits ; Keywords
H23 ; L51 ; Q28 ; Q58 ; JEL classification
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