If pollution is observable, but some emissions cannot be verified by court,voluntary agreements between a regulator and an industry may bewelfare-improving compared to second-best emission taxes. Such agreementsdiffer from direct regulation in a non-trivial way. The first-best optimummay be included in the set of possible agreements, even if it is notattainable using tax instruments. The non-verifiability may, for example, beassociated with delimitation problems in defining the pollution tax base. Copyright Kluwer Academic Publishers 2000
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Volume (Year): 17 (2000) Issue (Month): 2 (October) Pages: 125-144 Download reference. The following formats are available: HTML
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