, governments of the exporting firms do not have an incentive to under-regulate pollution in order to become more competitive. This … are non-tradable. Allowing for market power in the permits market, the incentive to under-regulate pollution re …-appears regardless of whether permits are tradable or not. With tradable permits, however, the incentive to under-regulate pollution is …

, governments of the exporting firms do not have an incentive to under-regulate pollution in order to become more competitive. This … are non-tradable. Allowing for market power in the permits market, the incentive to under-regulate pollution re …-appears regardless of whether permits are tradable or not. With tradable permits, however, the incentive to under-regulate pollution is …

competitiveness. Conventional theory claims that the trade-off between regulation and competitiveness will be negative while the …’s competitiveness, ecological dumping is the most likely outcome in a Cournot duopoly configuration. However, these results were derived …

emissions leakage in case of transboundary pollution. …

effects prevent all firms from locating in the same country. While under local or no pollution countries achieve the first …-best, under transboundary pollution taxes are inefficiently low and lower than under autarky where only the ‘standard’ free …