International pollution tax coordination

: a two-country aspect with capital mobility and different views on pollution damage

Abstract

Transboundary pollution (e.g., air pollution and water pollution) cannot be tackled effectively without cooperation among countries. However, countries usually have drfferent views about the extent of damage pollution has on their citizens, and ths makes cooperation on pollution control policy drfficult to acheve. Using a two-country model, ths paper examines the possibility of adopting five alternative policy coordmation schemes, i.e., (1) concertina rule, (2) one-to-one rule, (3) equiproportional rule, (4) uniform rahal rule, and (5) harmonization rule. Ths paper finds that the first four rules make a country better off at the expense of another country. Although the harmonization rule makes each country's benefit less as compared to the four other rules, both countries wdl benefit and therefore agree on using the harmonization rule to reform the tax structure.

Date of Award	3 Oct 2006
Original language	English
Awarding Institution	City University of Hong Kong
Supervisor	Siu Hung Eden YU (Supervisor)