Designing Regulatory Policies for Complex Externalities: The Case of Agricultural Pollution
AbstractThe paper examines the issue of designing and implementing policy measures to control complex agricultural externalities. Complex externalities refer to the situation where a production (firm on firm) externality coexists with a detrimental (firm on society) externality. The paper identifies the optimal solution for complex externalities, which is a combination of spatially differentiated taxes. However, severe information requirements render the first-best policy infeasible. Finally, a likely voluntary scheme based on firm self-report is examined which may enforce firm compliance with the optimal policy.
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Bibliographic InfoPaper provided by Agricultural University of Athens, Department Of Agricultural Economics in its series Working Papers with number 2012-6.
Length: 19 pages
Date of creation: 2012
Date of revision:
complex externalities; state dependent linear ambient tax; voluntary schemes; moral hazard; incentive compatibility; spatial externalities;
Find related papers by JEL classification:
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- Q19 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Other
- Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
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