Economics Seminar（2014-07）

Topic:Environmental Regulation in a Mixed Economy

Speaker:Guangliang Ye

Affiliation: Renmin University

Time:Tuesday, 8 April. 14:00-15:30pm

Location:Room217, Guanghua Building 2

Abstract：

Many developing countries are mixed economies in which public and private firms engage in Cournot competition. We show that some fundamental results in environmental economics fail to hold in these economies: more stringent environmental regulation does not necessarily reduce pollution levels, and the equivalence between environmental taxes and standards breaks down. The driving force lies in the endogenous objective functions of public firms manifested through the career choices of the public firm’s CEO. Instruments that can induce the CEO to choose a public career tend to be welfare dominant.

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