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Market Power and Global Public Goods

Authors: Kessing, Sebastian;

Market Power and Global Public Goods

Abstract

A global monopoly supplier country of green goods which are essential for the provision of global environmental public goods optimally subsidizes the export of such goods in an interior contribution equilibrium. This is not counterbalanced by an incentive to improve the terms-of-trade, since any price-induced transfers are off-set by contribution adjustments. By the same logic, a subsidy is costless for the monopoly supplier. The existence of a global monopoly supplier increases global public good supply relative to a competitive setting. The incentive to subsidize persists with impure public goods as long as the private co-benefits of green goods are sufficiently easy to substitute by other goods. Import-dependent countries may also benefit from a monopoly supplier. While they are strategically exploited to increase their contributions to the global public good, they do so at lower costs, and they benefit from increased contributions by the other importer countries.

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Keywords

China, Q54, ddc:330, market power, climate policy, global warming, D60, Net Zero Industry Act, global public goods, H41, Net-Zero Industry Act, terms-of-trade, Inflation Reduction Act

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
0
Average
Average
Average
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