Can carbon tax eat OPECʹs rents?

We consider the optimal emission tax for a stock pollutant when the pollutant flow is also regulated by a resource-exporting cartel. We consolidate, clarify, and generalize a set of previous results to obtain clear isolation of the Pigouvian and trade-policy components of the tax. Because of the trade-policy component, the tax can shift more rents from the cartel than the pollution causes damage-related costs. This leads to the possibility that the pollution problem accompanied by the coordination of taxation can bring about net benefits at the expense of the cartel.