The article examines conditions, under which the degree of democratization influences environmental policy outcomes, with a given resource endowments' heterogeneity as a crucial feature of a politico-economic process. We develop an OLG model with pollution as an aggregate externality. The...

We investigate how fuel taxation reduces climate and pollution externalities by evaluating the world’s largest environmental tax reform. Using spatially detailed emissions data from more than 1,000 European regions in a synthetic difference-in-differences framework, we evaluate the impact of...

We examine the welfare effects of removing explicit and implicit fossil fuel subsidies, the latter entailing Pigouvian pricing of local externalities from fossil energy consumption. We map a multi-region, multi-sector general equilibrium model to granular data on subsidies, local marginal...

Voluntary participation can improve multilateral environmental governance. We develop a theory of voluntary participation in federal environmental policy by states of differing wealth. Using a general equilibrium model, we formalize voluntary participation by a Pareto-improving federal emission...

This paper analyzes the political economy of government debt when elected politicians decide about the distribution of public funds be- tween a clean and a polluting public good. When provision of the polluting good creates a stock of climate externalities, strategic incentives for the incumbent...

We develop a dynamic regulation game for a stock externality under asymmetric information and future market uncertainty. Within this framework, regulation is characterized as the implementation of a welfare-maximization program conditional on informational constraints. We identify the most...

We introduce the link between pollution, morbidity and productivity over the life-cycle in a two-period overlapping generations model. As the environmental tax improves the health-profile over the life-cycle, it influences saving, investment in health, labor supply and retirement. As a result,...

The paper studies the use of emission taxes and feed-in subsidies for the regulation of a monopoly that can produce the same good with a technology that employs a polluting input and a clean technology. The second-best tax and subsidy are calculated solving a two-stage policy game between the...

European countries introduced a combination of demand-side fiscal policies and mandatory supply-side emissions standards to reduce CO2 emissions rates of new cars. I quantify the equilibrium response to one of the most drastic demand-side policies, the Finnish CO2 differentiation of automobile...

The paper studies the use of emission taxes and feed-in subsidies for the regulation of a monopoly that can produce the same good with a technology that employs a polluting input and a clean technology. In the first part of the paper, we show that the efficient solution can be implemented...