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Regulating an Externality-Generating Utility Environmental Taxes Under Limited Information

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  • Henry van Egteren

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    Abstract

    Global warming is currently an important item on most nationalenvironmental agendas. In many countries, coal-fired electricity generatingstations represent an important source of greenhouse gases. We examinehow regulations to curb emissions affect public utility pricing regulationwhen regulators act non-cooperatively. We show that, when there is limitedinformation on fixed abatement costs, an environmental regulator prefersan emission tax over an output tax or a lump sum environmental tax. Thepublic utility regulator prefers the lump sum tax regime. Copyright Kluwer Academic Publishers 2002

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    File URL: http://hdl.handle.net/10.1023/A:1014521221896
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    Bibliographic Info

    Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

    Volume (Year): 21 (2002)
    Issue (Month): 2 (February)
    Pages: 107-133

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    Handle: RePEc:kap:enreec:v:21:y:2002:i:2:p:107-133

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    Web page: http://www.springerlink.com/link.asp?id=100263

    Related research

    Keywords: adverse selection; electricity pricing; environmental taxes;

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    1. Dixit, Avinash & Grossman, Gene M. & Helpman, Elhanan, 1997. "Common Agency and Coordination: General Theory and Application to Government Policy Making," Scholarly Articles 3450061, Harvard University Department of Economics.
    2. Baron, David P., 1985. "Regulation of prices and pollution under incomplete information," Journal of Public Economics, Elsevier, vol. 28(2), pages 211-231, November.
    3. Schmutzler, Armin & Goulder, Lawrence H., 1997. "The Choice between Emission Taxes and Output Taxes under Imperfect Monitoring," Journal of Environmental Economics and Management, Elsevier, vol. 32(1), pages 51-64, January.
    4. Hoel, Michael, 1998. " Emission Taxes versus Other Environmental Policies," Scandinavian Journal of Economics, Wiley Blackwell, vol. 100(1), pages 79-104, March.
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    Cited by:
    1. Schmidt, Robert & Pollrich, Martin & Stiel, Caroline, 2013. "An optimal incentive contract to avert firm relocation under unilateral environmental regulation," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79741, Verein für Socialpolitik / German Economic Association.

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