goods and capital within the region. Pollution reduces welfare and there is simultaneous private and public pollution …-border pollution and capital mobility affect them. Finally, we examine the impact of capital mobility on the effectiveness of pollution …This paper builds a model of a region with two non-identical countries, cross-border pollution and free movements of …

-country regional block model with capital mobility and crossborder pollution. Pollution in the two countries is simultaneously abated … by the private sector, in response to a pollution tax and by the public sector utilizing income and pollution tax revenue …. We demonstrate, among other things, that due to the existence of cross-border pollution in many cases the Nash optimal …