Government, lobbies, international cooperation and the environment
Date
2012
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Abstract
This volume presents three research papers. In Chapter 1 I analyze whether an international technological agreement to develop and adopt a breakthrough technology can perform better than an international abatement agreement if an international market for the breakthrough technology is created. In the model presented, it is assumed that countries can form two international consortiums: i) a producing consortium that develops and sells the technology to outsiders and ii) a consuming consortium that chooses whether to buy and adopt the technology. Depending on the size of the gains from cooperation, two different outcomes are possible. If the gains are small, the adoption of the technology is incomplete. However, when the gains are sufficiently large, the producing consortium can apply a market mechanism that solves the free-riding problem among countries, allowing full adoption of the technology resulting in a significant global welfare improvement.
In Chapter 2 I analyze an economy with two types of environmental externalities, pollution and abatement externalities. Abatement activities in each sector depend on the level of abatement investment in that sector and the aggregate abatement activity in the economy. I show that when there are sufficient policy instruments to target the externalities, it can be in the interest of groups to lobby in favour of other sectors. I also show that an increase in the political influence of environmentalists does not necessarily result in a higher pollution tax and, under certain circumstances, it is in the interest of environmentalists to support polluting sectors.
In Chapter 3 I present an empirical study using time series analysis that investigates the price relationships between the American and the European markets for oil and major refined products. The econometric evidence supports the hypothesis that the American and European markets for oil and refined products are integrated. Moreover, the results suggest that a structural break occurred during the financial crisis of 2008, changing the long-run equilibrium price relationships and the short-run price dynamics. Taking into account this structural break, for each pair of prices I estimate the long-run equilibrium relationship and the error correction model to characterize the short-run price dynamic between the European and American markets.
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Bibliography: p. 106-112
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Citation
Zavaleta, A. (2012). Government, lobbies, international cooperation and the environment (Doctoral thesis, University of Calgary, Calgary, Canada). Retrieved from https://prism.ucalgary.ca. doi:10.11575/PRISM/4658