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On Efficiency of Decentralized Environmental Regulation

Author

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  • Mitch Kunce
  • Jason Shogren

Abstract

Contrary to conventional wisdom about an environmental race to the bottom, the theoretical literature as exemplified by Oates and Schwab [1988, Journal of Public Economics, 35:333–354] maintains that homogeneous jurisdictions’ decentralized choices are likely to be socially optimal because each locale sets capital tax rates to zero and sets optimal environmental standards. This paper shows the well-received Oates–Schwab-style efficiency result is not likely if allowed aggregate-emissions act as a firm-augmenting public input that benefits mobile firms. Copyright Springer Science+Business Media, Inc. 2005

Suggested Citation

  • Mitch Kunce & Jason Shogren, 2005. "On Efficiency of Decentralized Environmental Regulation," Journal of Regulatory Economics, Springer, vol. 28(2), pages 129-140, September.
    • Handle: RePEc:kap:regeco:v:28:y:2005:i:2:p:129-140
    DOI: 10.1007/s11149-005-3105-9
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    Citations

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    Cited by:

    1. Bert Saveyn, 2006. "Are NIMBY'S commuters?," Working Papers of Department of Economics, Leuven 500306, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.
    2. Fredriksson, Per G. & Wollscheid, Jim R., 2014. "Environmental decentralization and political centralization," Ecological Economics, Elsevier, vol. 107(C), pages 402-410.
    3. Bert Saveyn, 2013. "On NIMBY and commuting," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(2), pages 293-311, April.
    4. Mitch Kunce, 2023. "Decentralized Pollution Standard Setting with Agglomeration Forces Present in a Model of Specific Firm Mobility," Business & Entrepreneurship Journal, SCIENPRESS Ltd, vol. 12(1), pages 1-3.
    5. Alexeev, Alexander & Good, David H. & Krutilla, Kerry, 2016. "Environmental taxation and the double dividend in decentralized jurisdictions," Ecological Economics, Elsevier, vol. 122(C), pages 90-100.
    6. Vickerman, Roger, 2008. "Provision of public transport under conflicting regulatory regimes," Transportation Research Part A: Policy and Practice, Elsevier, vol. 42(9), pages 1176-1182, November.

    More about this item

    Keywords

    interjurisdictional competition; fiscal federalism; environmental federalism; H71; H73;
    All these keywords.

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects

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