This paper analyses how the way emission permits are traded -their market microstructure- impacts the optimal policy to be adopted by the environmental agency. The microstructure used is one of a quote driven market type, which characterizes many financial markets: market makers act as...

Allocations of tradable greenhouse gases (GHG) emission quotas among countries may take place according to several sharing rules corresponding to a certain perception of equity. For instance, allocating quotas in direct proportion to population, in inverse relation to GDP or according to past...

In this paper we test empirically with the Nordhaus and Yang (1996) RICE model the core property of the transfer scheme advocated by Germain, Toint and Tulkens (1997). This scheme is designed to sustain full cooperation in a voluntary international environmental agreement by making all countries...

Allocations of tradable greenhouse gases (GHG) emission quotas among countries may take place according to several sharing rules corresponding to a certain perception of equity. For instance, allocating quotas in direct proportion to population, in inverse relation to GDP or according to past...

Calling upon both positive and normative economics, the authors attempt to characterize the issues at stake in the current international negotiations on climatic change.

This paper investigates the optimal taxation path of a non-renewable resource in the presence of an imperfect substitute renewable resource. We present an optimal growth model and characterize the social optimum and the decentralized equilibrium. We show that the economy gradually reduces the...

The paper considers a model of a federation with two heterogeneous regions that try to attract the capital by competing in capital income taxes and public investment that enhance the productivity of capital. The regions' choices determine the allocation of capital across the regions and their...

This paper investigates the effectiveness of matching grants to correct for interjurisdictional spillovers in the light of Bernheim general neutrality result. Indeed this result suggests that the usual argument that matching grants are needed to internalize the externality arising from the...

Revenue sharing can be used to discourage low tax regions from competing for capital and firms with high tax regions. However, with heterogeneous regions, revenue sharing involves net transfers across regions and creates a 'moral-hazard' problem that is, regions may want to invest less in market...

The European economic integration leads to increasing mobility of factors, thereby threatening the stability of social transfer programs. This paper investigates the possibility to achieve by means of voluntary matching grants both the optimal allocation of factors and the optimal level of...