Environmental taxation: privatization with different public firm’s objective functions

Ferreira, Fernanda A.; Ferreira, Flávio

http://hdl.handle.net/10400.22/9049

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Authors

Ferreira, Fernanda A.

Ferreira, Flávio

Abstract(s)

In this paper, we study the effects of environmental taxes and privatization in a mixed market, by considering that the public firm aims to maximize the social welfare. The model has two stages. In the first stage, the government sets the environmental tax. Then, the firms engage in a Cournot competition, choosing output and pollution abatement levels. We also compare the results obtained with the ones got when the public firm aims to maximize the sum of consumer surplus and the firm’s profit.