Modeling of ecological and economic policy taking account of cross-country external effects

The paper analyzes the effect of the intensity of cross-border pollution on the contamination levels and national welfare, taking into account the changes of the optimal environmental tax rates in the neighboring countries. The paper reveals that increasing the country’s self-externality parameter (which characterizes cross-border pollution) definitely leads to an increase in emissions of pollutants and reduction of the level of national well-being; however, can reduce pollution and increase national well-being in the neighboring country. The conclusion is that the increase in externality parameters of the countries by the same value can reduce pollution and increase the national wealth in both countries.

mathematical modeling, optimization, ecological regulation, utility, external effects, ecological tax, equilibrium, elasticity, national welfare, industrial emissions.

Filippova I. Yu. Modeling of ecological and economic policy taking account of cross-country external effects // Business. Education. Law. Bulletin of Volgograd Business Institute. 2016. No. 3 (36). P. 120–126.