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Different regulatory bodies tend to develop environmental policies not recognizing the interdependencies between externalities. For example, one authority may regulate a stock pollution and another a flow pollution that result from the same activity. This study introduces a two-phase...
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We consider firms combining variable inputs and heterogeneous capital goods. Input use may cause simultaneous flow and stock externalities (e.g., air pollution/ climate change). Regulatory bodies typically develop separate policies for each externality but do not recognize that many...
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