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Emission Taxes and Tradeable Permits A Comparison of Views on Long-Run Efficiency

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  • John Pezzey

Abstract

We compare three different views on the long runefficiencies of emission taxes which includethresholds (inframarginalexemptions), and of tradeable emission permitswhere some permits areinitially free. The differences are caused bydifferent assumptions aboutwhether thresholds and free permits should besubsidies given only to firmsthat produce, or full property rights. Treatingtax thresholds, as well asfree permits, as property rights would departfrom the conventional view,but would allow greater flexibility in makingeconomic instruments bothefficient and acceptable. Such flexibilitycould be very important inachieving efficient control of greenhouse gasemissions. Copyright Kluwer Academic Publishers 2003

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  • John Pezzey, 2003. "Emission Taxes and Tradeable Permits A Comparison of Views on Long-Run Efficiency," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 26(2), pages 329-342, October.
    • Handle: RePEc:kap:enreec:v:26:y:2003:i:2:p:329-342
    DOI: 10.1023/A:1026393028473
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    More about this item

    Keywords

    efficiency; emission taxes; exemptions; thresholds; tradeable permits;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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