We follow Wellisch (1994) in examining the efficiency of regional policymaking in a model with interregional spillovers and in which individuals are attached to regions for cultural reasons. In addition, we assume that regions desire to maintain their social cohesion. We postulate that regional...

In the presence of local (sulfur) and global (carbon) pollutants, we examine the pollution haven hypothesis and free riding behavior. Under domestic emissions trading, poorer Southern countries become pollution havens when free trade opens up whenever sulfur damage functions are linear or when...

We demonstrate that global permit markets are Pareto efficient despite the externality type, production or consumption, when income redistribution occurs after regional environmental policymaking. Ex-ante income redistribution is neutral if emissions affect production only, but non-neutral if...

We examine decentralized environmental policy making in a federation characterized by decentralized leadership and imperfect labor mobility due to attachment to regions. Energy consumption generates positive consumption benefits, but energy supply generates federal air pollution. Regional...