Pollution Tax, Partial Privatization and Environment

Pal, R.; Saha, B.

doi:10.1016/j.reseneeco.2015.01.004

Pollution Tax, Partial Privatization and Environment

Pal, R.; Saha, B.

Authors

R. Pal

Dr Bibhas Saha b.c.saha@durham.ac.uk
Associate Professor

Abstract

Considering a differentiated mixed duopoly we show that when privatization and pollution tax are used together environmental damage will be non-monotone in the level of privatization, and optimal privatization is always partial privatization. Whether privatization will improve the environment or not depends on the public firm's concern for environment. If the public firm is unconcerned about environment, the socially optimal privatization will also damage the environment most. But when the public firm is concerned about environment, privatization will improve the environment. Generally, the relationship between optimal privatization and product substitutability is also non-monotone and inverted U-shaped.

Citation

Pal, R., & Saha, B. (2015). Pollution Tax, Partial Privatization and Environment. Resource and Energy Economics, 40, 19-35. https://doi.org/10.1016/j.reseneeco.2015.01.004

Journal Article Type	Article
Acceptance Date	Jan 20, 2015
Online Publication Date	Feb 7, 2015
Publication Date	May 1, 2015
Deposit Date	Jan 24, 2015
Publicly Available Date	Feb 10, 2015
Journal	Resource and Energy Economics
Print ISSN	0928-7655
Publisher	Elsevier
Peer Reviewed	Peer Reviewed
Volume	40
Pages	19-35
DOI	https://doi.org/10.1016/j.reseneeco.2015.01.004
Keywords	Privatization, Differentiated mixed duopoly, Environmental damage, Environmental tax, Social welfare.
Public URL	https://durham-repository.worktribe.com/output/1437845

Files

Accepted Journal Article (417 Kb)
PDF

Copyright Statement
NOTICE: this is the author’s version of a work that was accepted for publication in Resource and Energy Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Resource and Energy Economics, 40, May 2015, 10.1016/j.reseneeco.2015.01.004.