Cross-border pollution abatement and its synergy

ABSTRACT

The present study shows that in the case of cross-border pollution between two neighbouring jurisdictions, residents in each jurisdiction should undertake a competitive pollution abatement program. The present study considers an economy comprising two homogeneous regions, with each regional government competing to provide some local public good that can benefit not only the regions supplying them but also the other neighbouring regions. This study investigated the circumstances under which such regional spillovers mutually arise by comparing cases without spillover effects with those featuring varying levels of spillovers. The study result indicates that regions exhibiting a different levels of spillover provide higher welfare measures than those without spillover and that the higher the level of spillover the greater the social welfare measures yielded. The study also compares cases without synergy effects with those featuring varying levels of spillover.

KEYWORDS:

• Cross-border pollution
• pollution abatement
• local public goods
• spillovers
• synergy

JEL CLASSIFICATION:

• Q58
• R11

Disclosure statement

No potential conflict of interest was reported by the author.

Additional information

Funding

This work was supported by JSPS KAKENHI Grant-in-Aid for Scientific Research(C) Grant Number 18K01617.