We analyze a dynamic model of environmental policy in a stylized developing country (DC) with a dual economy. This DC's economy is distorted in part because the government subsidizes the exports of the non-polluting sector of the economy. We analyze the employment and output effects of three...

We study an intertemporal model of environmental policy in a developing country with a dual economy. This developing country's economy is distorted because, among other things, the government subsidizes the exports of the sector of the economy that does not pollute. We study the output and...