Template-type: ReDIF-Paper 1.0
Author-Name: Nikos Tsakiris
Author-Name: Panos Hatzipanayotou
Author-Name: Michael S. Michael
Title: Tradable Emission Permits and Strategic Capital Taxation
Classification-JEL: F18, F21, H21
Keywords: Emission Permits; Cross-border Pollution; Capital Tax Competition; Capital
Tax Rules
Abstract: In a model of two large asymmetric countries, we examine the effectiveness of the non-cooperative setting of tradable emission permits in reducing global pollution, under different rules of international taxation of capital earnings. Our key result is that, under certain conditions, the lowest Nash equilibrium level of global pollution is achieved when the policy-mix combines internationally, rather than nationally, tradable emission permits and either capital-tax exemptions or capital-tax credits.


Length: 18 pages
Creation-Date: 2022-01-14
File-URL: http://papers.econ.ucy.ac.cy/RePEc/papers/01-2022.pdf
File-Format: Application/pdf
Handle: RePEc:ucy:cypeua:01-2022