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Self-Financing Environmental Mechanisms Author info | Abstract | Publisher info | Download info | Related research | Statistics Joerg Breitscheidel ()
Hans Gersbach ()
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We explore the design of self-financing tax/subsidy mechanisms to solve hold-up problems in environmental regulation. Under Cournot competition, announcing the subsidy rate seems to be preferable to announcing the tax rate. Moreover, for constant marginal damage the hold-up problem can always be solved by setting subsidies. Under Bertrand competition, only announcing the tax rate can induce at least one firm to invest. We suggest that feebate systems in the automotive sector should be designed as self-financing tax/subsidy mechanisms.
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Paper provided by CESifo GmbH in its series CESifo Working Paper Series with number
CESifo Working Paper No. 1528.
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Date of creation: 2005Date of revision:
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Keywords: hold-up problems environmental regulation taxes and subsidies self-financing mechanisms emission control Find related papers by JEL classification: D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection D62 - Microeconomics - - Welfare Economics - - - Externalities L50 - Industrial Organization - - Regulation and Industrial Policy - - - General Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
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Breitscheidel, Jörg, 2005.
"Self-financing Tax/Subsidy Mechanisms in Environmental Regulation with Many Firms ,"
ZEW Discussion Papers
05-87, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
[Downloadable!]
Breitscheidel, Jörg, 2005.
"Hold-up Problems with Respect to R&D Investment and Licensing in Environmental Regulation ,"
ZEW Discussion Papers
05-86, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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