Eastern Europe: A subsidy strategy for ecological recovery
by Reinhard Haas
International Journal of Global Energy Issues (IJGEI), Vol. 6, No. 3/4/5, 1994

Abstract: Subsidies for eastern Europe are often considered to be a proper tool with which to restructure its economies. However, at the moment the western countries hesitate to pour money into these countries. In this article we discuss a dynamic subsidy strategy for ecological recovery. For simplicity's sake we consider two countries. The donor, e.g. a highly industrialized country, is threatened by pollution caused by its neighbour. It intends to subsidize environmental recovery of the recipient country. The polluter country, a former command economy, does not have the economic means to make substantive investments. The result of our analysis indicates that subsidizing different types of abatement devices can be a beneficial dynamic strategy.

Online publication date: Wed, 16-Jul-2014

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