This paper contributes to the theoretical understanding of strategic interactions of governments on global factor markets. We analyze carbon taxes and subsidies and their impact on national welfare in a fiscal federalism setting with international markets for capital and fossil resources, and...

We consider an economy in which competitive firms use three technologies for electricity production: pollutive fossils, intermittent renewables like wind or solar, and storage. We determine optimal subsidies for renewables and storage capacities when carbon pricing is imperfect. This policy is...

This paper demonstrates that a pollution tax with a fixed cost component may lead, by itself, to segregation between clean and dirty firms without heterogeneous preferences or increasing returns. We construct a simple model with two locations and two industries (clean and dirty) where pollution...

The need to decarbonize economic production processes is undeniable and has been considered by most countries worldwide. Renewable Energy Sources (RES) and Carbon Capture and Sequestration (CCS) technologies appear among the most promising routes to the decarbonization process. We propose an...

This paper studies the interaction of environmental policy and green preferences under potential firm relocation. A green firm and a brown firm choose the environ- mental quality of their products. Both an emission tax and consumers' willingness to pay for green products encourage investment in...

Carbon pricing is the efficient instrument to reduce emissions. However, the geographical and sectoral coverage of substantial carbon pricing is low, often due to concerns that pricing may increase economic inequality. Regulatory standards such as fuel economy standards are more popular. But do...

It is widely believed that an environmental tax (price regulation) and cap-and-trade (quantity regulation) are equally efficient in controlling pollution when there is no uncertainty. We show that this is not the case if some consumers (firms, local governments) are morally concerned about...