It is tricky to design local regulations on global externalities, especially so if firms are mobile. We show that when costs and outside options are firms' private information, the threat of firm relocation leads to local regulations that are stricter, not looser. This result is general and...

It is tricky to design local regulations on global externalities, especially so if firms are mobile. We show that when costs and outside options are firms’ private information, the threat of firm relocation leads to local regulations that are stricter, not looser. This result is general and...

Carbon leakage is one of the major issues facing policymakers today when designing environmental regulation. While the empirical and trade literature on carbon leakage is rich, much less is known about the implications of carbon leakage risk on optimal regulatory policies under asymmetric...

We document that localized policies aimed at mitigating climate risk can have unintended consequences due to regulatory arbitrage by firms. Using a difference-in-differences framework to study the impact of the California cap-and-trade program with US plant level data, we show that financially...

This article discusses the potential benefits of an enhanced use of externality pricing schemes in the Asia Pacific. Prices on emissions and congestion could ameliorate the negative effects of underpriced resource use, be pro-poor, and improve fiscal capacities. The main implementation...

This paper discusses the externalities and market failures in cryptocurrency markets. In particular, I highlight the significant environmental externalities created by Proof-of-Work (PoW) cryptocurrencies, the most prominent of which is Bitcoin. The main goals of this paper are to quantify these...

This paper first reviews the conceptual case for, and appropriate design of, fiscal policies to address major externalities associated with energy use - global warming, local air pollution, and various side effects (e.g., congestion) from motor vehicles. Techniques for (roughly) estimating the...

We study how public policies affects an economy where production emits pollutants and investment in productive assets raises the economy's overall productivity. We explore two hypotheses about how the accumulation of pollutants affects human well-being. Under the first one, there is no limit to...

This paper first reviews the conceptual case for, and appropriate design of, fiscal policies to address major externalities associated with energy use—global warming, local air pollution, and various side effects (e.g., congestion) from motor vehicles. Techniques for (roughly) estimating the...

This paper first reviews the conceptual case for, and appropriate design of, fiscal policies to address major externalities associated with energy use-global warming, local air pollution, and various side effects (e.g., congestion) from motor vehicles. Techniques for (roughly) estimating the...