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Controlling Urban Air Pollution Caused by Households: Uncertainty, Prices, and Income

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  • Carlos Chávez

    ()
    (Departamento de Economía, Universidad de Concepción)

  • John K. Stranlund

    (Department of Resource Economics, University of Massachusetts - Amherst)

  • Walter Gómez

    (Departamento de Ingeniería Matemática, Universidad de la Frontera)

Abstract

We examine the control of air pollution caused by households burning wood for heating and cooking in the developing world. Since the problem is one of controlling emissions from nonpoint sources, regulations are likely to be directed at household choices of wood consumption and combustion technologies. Moreover, these choices are subtractions from, or contributions to, the pure public good of air quality. Consequently, the efficient policy design is not independent of the distribution of household income. Since it is unrealistic to assume that environmental authorities can make lump sum income transfers part of control policies, efficient control of air pollution caused by wood consumption entails a higher tax on wood consumption and a higher subsidy for more efficient combustion technologies for higher income households. Among other difficulties, implementing a policy to promote the adoption of cleaner combustion technologies must overcome the seemingly paradoxical result that efficient control calls for higher technology subsidies for higher income households.

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Bibliographic Info

Paper provided by Departamento de Economía, Universidad de Concepción in its series Working Papers with number 04-2010.

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Date of creation: 2010
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Handle: RePEc:cnc:wpaper:04-2010

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Postal: Victoria 471, Conceptión
Web page: http://economia.udec.cl
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Keywords: : Efficiency; urban air pollution; nonpoint pollution; environmental policy; uncertainty;

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