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Information sharing and environmental policies.

Fabio Antoniou¹, Phoebe Koundouri, Nikos Tsakiris

¹Department of Economics, University of Cyprus, University Campus, Nicosia 1678, Cyprus. fabio.antoniou@ucy.ac.cy

International Journal of Environmental Research and Public Health

|December 9, 2010

Summary

Governments and firms are more likely to share information when emission standards are used for pollution control, but less likely when emission taxes are the regulatory tool. This impacts environmental policy agreements.

Keywords:

emission standards emission taxes information sharing pollution strategic environmental policy

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Area of Science:

Environmental economics
Information economics
Public policy

Background:

Standard eco-dumping models often assume government uncertainty about future product demand.
Governments may seek information from firms to improve regulatory effectiveness.
Information sharing between regulators and firms is crucial for policy design.

Purpose of the Study:

To analyze the incentives for governments and firms to share information within an eco-dumping framework.
To investigate how different regulatory mechanisms (emission standards vs. emission taxes) affect information sharing agreements.

Main Methods:

Theoretical modeling of government and firm interactions.
Analysis of information sharing incentives under different regulatory regimes.
Eco-dumping model with endogenous information acquisition.

Main Results:

Governments and polluting firms are inclined to agree on information sharing when emission standards are the chosen regulatory instrument.
Conversely, when governments utilize emission taxes to regulate pollution, information sharing agreements between governments and firms are unlikely to be reached.

Conclusions:

The choice of regulatory instrument significantly influences the potential for collaborative information sharing in environmental policy.
Emission standards facilitate cooperation, while emission taxes may create adversarial information dynamics.