Published on March 23, 2020 – Updated on March 25, 2020

Focus on Research

Environmental services and market power: What is the optimal environmental policy?


The market for environmental goods and services is booming. It enables firms to reduce their polluting emissions and comply with environmental policies. However, this sector is highly concentrated. While the economic literature has established the optimal environmental policy in this context, it considers environmental goods and not environmental services. Considering this point, it is shown that a first-best environmental policy can be implemented by public authorities despite the market power in the eco-industry.

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