An additive tax and subsidy for controlling automobile pollution
AbstractIt is well known that a unit tax on the emissions of polluting firms and an equal unit subsidy for emissions abated are not symmetrical instruments. However, when no entry-exit conditions are at stake, as in the case of polluting households, the tax and subsidy are equivalent. Moreover, any combination of the two, summing to marginal pollution damage, is also efficient. This strong result is applied to the case of an economy in which each household owns an automobile. It also extends to the case in which some households rely on mass-transit or car-pooling, provided that such households also receive the subsidy.
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Bibliographic InfoArticle provided by Taylor and Francis Journals in its journal Applied Economics Letters.
Volume (Year): 3 (1996)
Issue (Month): 7 ()
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- Fullerton Don & West Sarah E, 2010.
"Tax and Subsidy Combinations for the Control of Car Pollution,"
The B.E. Journal of Economic Analysis & Policy,
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- Fullerton, Don & West, Sarah E., 2002.
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- West, Sarah E., 2004. "Distributional effects of alternative vehicle pollution control policies," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 735-757, March.
- Ye Feng & Don Fullerton & Li Gan, 2005. "Vehicle Choices, Miles Driven, and Pollution Policies," NBER Working Papers 11553, National Bureau of Economic Research, Inc.
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