Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Global environmental policies with innovation spillovers

Global environmental policies with innovation spillovers The purpose of this paper is to explore automobile fuel efficiency policies in the presence of two externalities: a global environmental problem and international innovation spillovers.Design/methodology/approachUsing a simple model with two regions, the authors show that both a fuel tax and a tax on vehicles based on their fuel economy rating are needed to decentralize the first best.FindingsIf standards are used instead of taxes, the authors find that spillovers may alleviate free-riding. Under some conditions, a strict standard in one region may favor the adoption of a strict standard in the other one.Originality/valueThe authors also show that if policies are not coordinated between regions, the resulting gas taxes will be set too low and each region will use the tax on fuel rating to reduce the damage caused by foreign drivers. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Management of Environmental Quality: An International Journal Emerald Publishing

Global environmental policies with innovation spillovers

Loading next page...
 
/lp/emerald-publishing/global-environmental-policies-with-innovation-spillovers-KrSw90k658
Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1477-7835
DOI
10.1108/meq-05-2018-0098
Publisher site
See Article on Publisher Site

Abstract

The purpose of this paper is to explore automobile fuel efficiency policies in the presence of two externalities: a global environmental problem and international innovation spillovers.Design/methodology/approachUsing a simple model with two regions, the authors show that both a fuel tax and a tax on vehicles based on their fuel economy rating are needed to decentralize the first best.FindingsIf standards are used instead of taxes, the authors find that spillovers may alleviate free-riding. Under some conditions, a strict standard in one region may favor the adoption of a strict standard in the other one.Originality/valueThe authors also show that if policies are not coordinated between regions, the resulting gas taxes will be set too low and each region will use the tax on fuel rating to reduce the damage caused by foreign drivers.

Journal

Management of Environmental Quality: An International JournalEmerald Publishing

Published: May 15, 2019

Keywords: Environmental policy; Fuel efficiency standard; Gasoline tax; Innovation spillovers

References