Could environmental public policy be harmful for the environment?

This article analyzes the consequences of environmental public policy when private agents have access to abatement activity, financed by private contributions. The issue at stake is the interactions between private involvement in abatement activities and public intervention. The analysis of the consequences of environmental tax policy on capital and environmental quality shows that public and private abatements may or may not be substitutable, depending on abatement efficiencies and on the initial economic and environmental inefficiencies. JEL Classification: Q52, Q58.