Title: Eastern Europe: A subsidy strategy for ecological recovery

Authors: Reinhard Haas

Addresses: Institute of Energy Economics, Technical University of Vienna, Gusshausstrasse 27-29, A-1040 Vienna, Austria

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.

Keywords: Eastern Europe; energy policy; environmental recovery; intertemporal model; subsidies; ecological recovery; environmental pollution.

DOI: 10.1504/IJGEI.1994.063533

International Journal of Global Energy Issues, 1994 Vol.6 No.3/4/5, pp.133-138

Published online: 16 Jul 2014 *

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