Efficient Tax-Subsidy for a Polluting Durable Good Industry without Commitment Ability
AbstractThis paper considers efficient regulation in polluting and imperfectly competitive durable-good markets without commitment ability of producers. If producers rent the durable, then the efficient regulatory scheme consists of a Pigovian emissions tax and a subsidy on the stock of the durable good. In sales markets, efficiency is attained by adjusting the stock subsidy and introducing a durability tax/subsidy. If direct durability regulation is not feasible, then efficiency can still be achieved, but the emissions tax has to be adjusted as well. The efficient stock subsidy may change its sign so that it becomes a tax. Policy implications and their relevance are discussed.
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Bibliographic InfoArticle provided by Mohr Siebeck, Tübingen in its journal FinanzArchiv.
Volume (Year): 60 (2004)
Issue (Month): 4 (December)
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Find related papers by JEL classification:
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
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- Aronsson, Thomas & Sjögren, Tomas & Witterblad, Mikael, 2008. "Optimal Taxation and Asymmetric Information in an Economy with Second-Hand Trade," UmeÃ¥ Economic Studies 732, Umeå University, Department of Economics.
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