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Voluntary Green Commitment and Optimal Privatization Policy in a Mixed Eco-Industry

Author

Listed:
  • Park Chul-Hi

    (Center for Regional Development, Chonnam National University, 77 Yongbong-ro, Bukgu, Gwangju 500-757, South Korea)

  • Lee Sang-Ho

    (Graduate School of Economics, Chonnam National University, 77 Yongbong-ro, Bukgu, Gwangju 500-757, South Korea)

  • Nakamura Tamotsu

    (Graduate School of Economics, Kobe University, 2-1 Rokkodai, Nada-ku, Kobe 657-8501, Japan)

Abstract

This study investigates the impact of target emissions from polluting firms on the production of green technology and the optimal policy decisions of privatization on the eco-industry under their voluntary commitments. For this, we formulate a vertical structure consisting of a downstream polluting industry and an upstream mixed eco-industry where private and public eco-firms produce emission abatement goods. The results show a U-shaped non-monotone relationship between environmental damage and the optimal degree of privatization, that is, welfare-maximizing public ownership is full nationalization or full or partial privatization, depending on the environmental damage. It supports that the government should have large ownership of partially privatized eco-firms for environmental protection, especially when environmental damage is serious.

Suggested Citation

  • Park Chul-Hi & Lee Sang-Ho & Nakamura Tamotsu, 2022. "Voluntary Green Commitment and Optimal Privatization Policy in a Mixed Eco-Industry," Asian Journal of Law and Economics, De Gruyter, vol. 13(2), pages 149-171, August.
    • Handle: RePEc:bpj:ajlecn:v:13:y:2022:i:2:p:149-171:n:5
    DOI: 10.1515/ajle-2022-0044
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    References listed on IDEAS

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    1. David, Maia & Nimubona, Alain-Désiré & Sinclair-Desgagné, Bernard, 2011. "Emission taxes and the market for abatement goods and services," Resource and Energy Economics, Elsevier, vol. 33(1), pages 179-191, January.
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    Cited by:

    1. Heywood, John S. & Wang, Zerong & Ye, Guangliang, 2023. "Spatial price discrimination in a mixed duopoly input market," Regional Science and Urban Economics, Elsevier, vol. 102(C).
    2. Chen, Hung-Yi & Yang, Ya-Po & Hu, Jin-Li, 2023. "Environmental taxes under mixed duopoly: The roles of privatization and foreign eco-technology," Economic Modelling, Elsevier, vol. 126(C).
    3. Doori Kim & Sang‐Ho Lee, 2024. "Environmental policies with the excess burden of public funds and privatisation," Australian Economic Papers, Wiley Blackwell, vol. 63(2), pages 329-349, June.

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    More about this item

    Keywords

    abatement goods; commitments on target emissions; eco-industry; mixed oligopoly; partial privatization;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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