The Incentives for North-South Transfer of Climate-Mitigation Technologies with Trade in Polluting Goods

The need to transfer climate mitigation technologies towards the developing world has been acknowledged since the beginning of climate negotiations. Little progress has however been made, as shown by Article 10 of the Paris Agreement. One reason is that these technologies could become vital assets to compete on global markets. This paper presents a partial equilibrium model with two regions, the North and the South, and imperfect competition in the international polluting goods market, to analyze the North’s incentives to accept technology transfer. Results crucially depend on the existence of environmental cooperation. When both northern and southern governments set emission quotas non-cooperatively, inducing fewer global emissions is a necessary, but not sufficient condition for the North to accept the transfer. In contrast, when governments set quotas cooperatively, the North has no incentive to share its technology either before or after the agreement. Technology transfer commitments may be included in the agreement, but with no effect on global emissions and global surplus. The only impacts are distributional, technology transfers and side payments may be substitute instruments.     

Participation constraints of matching mechanisms

Matching mechanisms have been proposed to improve public good provision in voluntary contributions. However, such decentralized subsidizing mechanisms may not be Pareto‐improving and may suffer from incomplete information and incredible commitment. This paper examines participation constraints of matching mechanisms with small matching rates in two cases of equilibria. At interior equilibria, there always exist small Pareto‐improving matching schemes regardless of preferences. This universal existence is useful for cooperation among heterogeneous players in the context without global information of preferences or at the international level without central governments. At corner equilibria, matching schemes work in different ways and have distinct welfare effects in certain cases, and the existence of Pareto‐improving matching schemes is not universal but is possible under certain conditions. The paper further characterizes Pareto‐improving matching schemes, and shows that it is easier to reach Pareto‐improving matching outcomes if players value more on public goods and have stronger substitution between private and public goods.     

Inter‐regional competition,comparative advantage and environmental federalism

In this paper, we compare endogenous environmental policy setting with centralized and decentralized governments when regions have comparative advantages in different polluting goods. We develop a two‐region, two‐good model with inter‐regional environmental damages and perfect competition in product markets, where both regions produce both goods. Despite positive spillovers of pollution across regions, the model predicts that decentralization may lead to weaker or stricter environmental standards or taxes, depending on the degree of regional comparative advantage and the extent of transboundary pollution. This suggests that federalism can lead to either a “race to the bottom” or a “race to the top,” without relying on inefficient lobbying efforts or capital competition.     

污染产业转移视角下FDI环境外部性的跨界效应

通过FDI方式的污染产业转移会产生环境负外部性,在空间上存在跨界效应.这体现在承接污染产业会直接带来环境污染,从而引起居民福利的大量损失,而且还会因为自然因素导致跨界污染.目前,FDI的环境影响主要集中在东部地区,但有向中西部地区转移的趋势.许多地方政府为吸引FDI而进行的环境竞争,对这种跨界效应会起到相当的放大作用.因而需要采取调整政府人员业绩考核机制、鼓励地方政府增加环境投资、中西部地区按照全国主体功能区划要求制定分类的FDI环境管理政策、实行跨区域联合治理等措施,尽可能减少甚至消除FDI环境外部性的跨界效应.     

Effects of Transboundary Pollution on the Mode of International Trade of a Polluting Good*

By analyzing a strategic interaction between environmentally‐concerned governments, we examine how the competition mode of international polluting oligopoly is determined. We show that a resulting form of competition depends on the magnitudes of marginal damage costs and cross‐border spillover as well as on the degrees of similarities in these environment‐related parameters.     

中国制造业环境规制对技术创新影响的阶段性差异与行业异质性研究

首先,将技术创新划分为技术研发和技术转化两阶段,应用CES生产函数分阶段推导环境规制与技术创新的数理关系。其次,根据污染排放强度将中国制造业28个细分行业划分为重度污染型、中度污染型及轻度污染型3种类型,以2003-2012年行业面板数据为样本,构建分阶段分行业的计量回归模型进行环境规制对技术创新的实证检验。数理推导证明：环境规制与企业技术研发和技术转化在数理上均存在正相关关系。实证检验发现：①环境规制对中国制造业技术研发专利成果和技术转化新产品生产具有显著促进作用,波特假说在制造业整体上得到验证;②环境规制对中度污染行业、轻度污染行业的技术创新具有显著促进作用,但对重度污染行业的影响并不显著,波特假说存在明显的行业异质性。最后,针对环境规制对技术创新影响的阶段性和行业异质性提出了相关政策建议。     

International support of climate change policies in developing countries: Strategic, moral and fairness aspects

International transfers in climate policy channeled from the industrialized to the developing world either support the mitigation of climate change or the adaptation to global warming. From a purely allocative point of view, transfers supporting mitigation tend to be Pareto-improving whereas this is not very likely in the case of adaptation support. We illustrate this by regarding transfer schemes currently applied under the UN Framework Convention on Climate Change (UNFCCC) and the Kyoto framework.However, if we enrich the analysis by integrating distributional aspects, we find that international adaptation funding may help both the developing and developed world. Interestingly this is not due to altruistic incentives, but due to follow-up effects on international negotiations on climate change mitigation. We argue that the lack of fairness perceived by developing countries in the international climate policy arena can be reduced by the support of adaptation in these countries. As we show - taking into account different fairness concepts - this might raise the prospects of success in international negotiations on climate change. Yet, we find that the influence of transfers may induce different fairness effects on climate change mitigation negotiations to run counter.We discuss whether current transfer schemes under the UNFCCC and the Kyoto framework adequately serve the distributive and allocative objectives pursued in international climate policy.     

Dynamic Games of Environmental Policy in a Global Economy: Taxes versus Quotas

The effects of environmental policy on the global environment as an international public good with a stock externality and national welfare are examined in a model with trade in a polluting commodity. The welfare effects of environmental policy, decomposed into terms of trade, abatement cost, and environmental damage effects, induce governments to adopt a strategic use of their policy measures. In the absence of international cooperation on environmental policy, it is demonstrated that the emission tax game brings about larger strategic distortions than the emission quota game.     

NONLINEAR INCOME TAXATION AND MATCHING GRANTS IN A FEDERATION WITH DECENTRALIZED IN‐KIND TRANSFERS*

We extend to a fiscal federalism setting the literature on redistributive in‐kind transfers in the presence of nonlinear income taxation. Local governments have a cost advantage, motivating decentralization of the in‐kind transfer. The cost structure varies across regions, and the central government cannot observe which region is which. We show that decentralized in‐kind transfers can, in this setting, be an even more important instrument for relaxing self‐selection constraints, thus, helping redistribution, than in single‐government models. We characterize the optimal marginal tax rates and matching grants. The grants have a very different structure than the one derived in earlier studies.     

Westward movement of new polluting firms in China: Pollution reduction mandates and location choice

This paper provides a systematic study of the location choice of new polluting firms driven by the 11th Five-Year Plan's water pollution reduction mandates in China. We explore a unique dataset of environmental statistics, which contains 31380 polluting manufacturing firms newly established in the period 2006–2010. Our conditional logit model provides strong evidence for the changes of new polluting firms’ location choice from the coastal provinces, which have strict environmental mandates, to the western provinces, which have lax environmental mandates, and demonstrates the distinct location patterns of heterogeneous polluting firms. While foreign polluting firms were generally driven by the mandates, domestic polluting firms were more resistant and were driven to the western provinces only after 2007. As a result, the potential pollution transfer would threaten the more fragile water environments and public health in western provinces. We thus posit a perverse incentive of current environmental policy and recommend integrated water management as well as close coordination of local governments to improve the efficacy of environmental regulation in China.     

Incentives to Diffuse Advanced Abatement Technology Under the Formation of International Environmental Agreements

We analyse the incentives for polluting firms to diffuse and adopt advanced abatement technology in a framework in which governments negotiate an international environmental agreement. These incentives crucially depend on whether the underlying environmental policy instrument is an emission tax or an emission quota. The results for the international setting fundamentally differ from those for the national setting that have been elaborated upon in the earlier literature. In particular, equilibrium diffusion and adoption of advanced abatement technology are not necessarily optimal under the tax regime and may be even lower than those under the quota regime.     

中央政府供给地区生态补偿的内生缺陷——对补偿原则和收益原则内在矛盾的分析

我国现在实施的生态补偿以财政补偿为主，其中，中央对地方的财政补偿所占的比例最高。鉴于这种情况，作者从地方公共品供给的角度，考察了由于补偿原则和收益原则的内在矛盾——在功利主义回报原则下，中央政府的转移支付难以达到完全补偿；在自然回报原则下，中央政府的转移支付显著的使分配非中性，违背自然回报原则所要求的中立性——不能同时达到补偿的完全性与中性。由于这种内生缺陷的存在，中央政府供给地区生态补偿时难以使所有地区都满意，其本身也陷入难以进退的矛盾境地。本文认为在我国纵向转移支付占据主导地位的今天，政府若要有效供给诸如环境保护类型的溢出性地方公共品，就应该转变单线条的由上至下的转移支付模式，强化地方供给，加强地区之间的横向交流，如让地区之间直接谈判如何划分合作的收益或如何进行横向的补偿，以使地方政府承担更多的地区生态补偿责任。     

Exporters and the environment

This paper documents a relationship between international trade and environmental performance at the plant level. Using a panel of establishment‐level data from 1990–2006, I estimate the relationship between export orientation, import competition and pollution emissions. I find a robust relationship between international trade and pollution levels. Exporters emit 9% to 13% less after controlling for output, but there is significant heterogeneity across industries. Import competition is associated with the exit of the smallest, most pollution‐intensive plants. There is no evidence that this result is caused by polluting firms relocating to countries with low levels of environmental regulation and importing back into the US.     

Federal transfers, environmental policy and economic growth

We study the effects of commonly used cross-country transfer programs on uncoordinated national environmental policies, economic growth and natural resources in a federal economy. Natural resources are a federation-wide public good. In each member country, production degrades the environment, but clean-up policy can improve it. Clean-up policy is financed by taxes on polluting firms’ output and cross-country redistributive transfers. We solve for a symmetric Nash equilibrium among national governments. Transfer policies that lead to higher pollution taxes make existence harder, and are harmful not only to growth but also to the environment. The best way to improve environmental quality is to implement a taxation system that stimulates growth and broadens tax bases to finance national clean-up policies.     

DYNAMIC ENVIRONMENTAL TAXES UNDER INTERNATIONAL DUOPOLY

This paper studies a dynamic game of environmental taxes between two countries in the absence of explicit trade policies when both governments and firms act strategically. We demonstrate that the environmental tax in the steady‐state equilibrium in a dynamic environmental tax game is lower than that in a static environmental one. Therefore, the dynamic behaviour of the governments results in an increase in the environmental damage. Further, as a result of international cooperation on environmental taxes between two countries in the beginning of policy competition, there is an increase in the optimal environmental tax. This implies that it is important to set cooperative environmental taxes in the beginning of policy competition because non‐cooperative environmental taxes in the dynamic game result in the race‐to‐the‐bottom, which does not lead to environmental improvement.     

A Public Choice Approach to Strategic and Nonstrategic Environmental Policy

In this paper we take a public choice perspective on strategic environmental policy and international environmental agreements. We examine cooperative and noncooperative environmental policies under governments that are either welfare maximizers (“good dictators”) or tax revenue maximizers (“Leviathans”). We show that Leviathans can perform better in terms of welfare and that good dictators can set higher taxes. We then analyze international environmental agreements and show that the breakdown of environmental cooperation can indeed lead to a welfare gain for all signatory countries. Considering a delegation game between governments, we find that a Pareto‐superior Leviathan outcome can be the unique Nash equilibrium.     

Environmental policy instruments and imperfectly competitive international trade

Policy makers, industrialists and environmentalists express concern that the imposition of tough environmental policies in some countries displaces production, and hence pollution, to countries which impose less tough environmental policies. Yet empirical studies of such impacts suggest they are small. However, these findings are derived from models in which international trade is modelled as being perfectly competitive. In this paper I model trade as imperfectly competitive with scope for strategic behavior by producers, in this case investment in capital. I show that the choice of environmental policy instrument can have a marked impact on the incentives for producers to act strategically, with environmental standards significantly reducing the incentives for strategic overinvestment relative to environmental taxes or no environmental policy at all. Whether welfare is higher using standards or taxes depends on whether producing countries are also significant consumers of the polluting product, and on whether all producing governments act to reduce emissions or only some subset of governments. To assess the quantitative significance of these theoretical results I conduct policy simulations on a calibrated model of the world fertilizer industry. These simulations show that the impact of environmental policy on strategic behaviour can be large.     

论多边环境协定与WTO的关系

随着全球环境问题的影响范围逐渐扩张,国际社会开始关注全球环境变迁,目前各种国际环境议题开始通过协商与谈判,制订国际公约加以规范以达成环境治理目标。而WTO以贸易自由化为主要目标,它与多边环境协定之间的竞合关系成为值得深入探讨的议题。文章通过分析WTO的环保立场、WTO有关多边环境协定的谈判内容及多哈回合谈判暂停对WTO贸易与环境谈判的影响阐述WTO与多边环境保护协定的关系。     

建立环境税收制度 走可持续发展之路

随着可持续发展理论得到国际社会日益广泛的认同，环境保护问题也备受各国政府的重视。我国长期以来的经济高速增长是通过以大量消耗资源、严重污染环境为特征的粗放型经济发展模式来实现的，由此也造成一系列严重的环境问题。我国应在进一步完善现行环境保护税收措施的基础上，尽快研究开征环境保护税，使其作为环境税收制度的主体税种，构建起一套科学、完整的环境税收制度体系，使税收在环境保护方面发挥更重要的作用。     

Strategic Environmental Standards, Wage Incomes and the Location of Polluting Firms

The purpose of this paper is tostudy how the choice of environmental standardsby governments is affected by the existence ofwage incomes when firms locations areendogenous. In developed countries labor isunionized, which allows positive wage incomesto arise. Thus, each government has incentivesto persuade firms to locate in its countrysince social welfare depends on suchincomes. But, as pollution damages theenvironment, each government will only try toattract polluting firms to thecountry, to obtain the wage incomes, whenthe valuation of environmental damage showsthat it is low.