Environmental policy and wage setting

María Luz Campo


This paper studies the interaction between the performance of firms and unions and the environmental policy chosen by governments when there is a negative environmental externality from production of a good which only affects the country where the firm is located. I assume that governments choose an upper limit on emissions, unions choose the wage rates and firms choose the employment level. Specifically, I analyze the effect that unionized labor markets have on environmental policy.


Monopoly union model; emission standards

Subject classification

J30, J51, Q28.

Full Text:



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 Universitat Politècnica de València

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