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Taxes and Quotas for a Stock Pollutant with Multiplicative Uncertainty Author info | Abstract | Publisher info | Download info | Related research | Statistics Michael Hoel (University of Oslo, Norway)
Larry Karp (Department of Agriculture and Resource Economics, Berkeley, California)
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We compare taxes and quotas when firms and the regulator have asymmetric information about abatement costs. Damages are caused by a stock pollutant. Uncertainty enters multiplicatively, i.e. it affects the slope rather than the intercept of abatement costs. We calibrate the model using cost and damage estimates of greenhouse gases. As with additive uncertainty, taxes dominate quotas. The advantage of taxes is much greater with mulitiplicative, compared to additive uncertainty.
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Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number
1999.15.
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Keywords: Pollution control ; asymmetric information ; taxes and quotas ; stochastic control ; global warming ; multiplicative disturbances ; Other versions of this item:
Article Paper Michael Hoel & Larry Karp, 2000.
"Taxes and Quotas for a Stock Pollutant with Multiplicative Uncertainty ,"
Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series
870, Department of Agricultural & Resource Economics, UC Berkeley.
[Downloadable!] Hoel, Michael & Karp, Larry S., 1999.
"Taxes and quotas for a stock pollutant with multiplicative uncertainty ,"
CUDARE Working Paper Series
870, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy, revised 1999.
[Downloadable!] Find related papers by JEL classification: 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
This paper has been announced in the following NEP Reports :
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Hoel, Michael & Karp, Larry, 2002.
"Taxes versus quotas for a stock pollutant ,"
Resource and Energy Economics ,
Elsevier, vol. 24(4), pages 367-384, November.
[Downloadable!] (restricted)
Other versions:
Michael Hoel & Larry Karp, 2001.
"Taxes versus Quotas for a Stock Pollutant ,"
Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series
855, Department of Agricultural & Resource Economics, UC Berkeley.
[Downloadable!] Hoel, Michael & Karp, Larry S., 1999.
"Taxes versus quotas for a stock pollutant ,"
CUDARE Working Paper Series
855, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy, revised 1999.
Malcomson, James M, 1978.
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
Larry Karp & Jinhua Zhao, 2008.
"A Proposal for the Design of the Successor to the Kyoto Protocol ,"
Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series
1065, Department of Agricultural & Resource Economics, UC Berkeley.
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Jon Hovi og Bjart Holtsmark, 2005.
"Cap-and-Trade or Carbon Taxes? The Feasibility of Enforcement and the Effects of Non-Compliance ,"
Discussion Papers
436, Research Department of Statistics Norway.
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Other versions: Zhang, Jiangfeng, 2001.
"Dynamic Water Regulation Under Endogenous Irrigation Investment and Production Uncertainty ,"
2001 Annual meeting, August 5-8, Chicago, IL
20661, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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Larry Karp & Jiangfeng Zhang, 2008.
"Taxes Versus Quantities for a Stock Pollutant with Endogenous Abatement Costs and Asymmetric Information ,"
Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series
1064, Department of Agricultural & Resource Economics, UC Berkeley.
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Larry Karp & Xuemei Liu, .
"Valuing Tradable CO2 Permits for OECD Countries ,"
Working Papers
1999.31, Fondazione Eni Enrico Mattei.
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Other versions:
Larry Karp & Xuemei Liu, 1999.
"Valuing Tradeable CO2 Permits for OECD Countries ,"
Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series
872, Department of Agricultural & Resource Economics, UC Berkeley.
[Downloadable!] Karp, Larry S. & Liu, Xuemei, 1998.
"Valuing tradeable CO2 permits for OECD countries ,"
CUDARE Working Paper Series
872, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
[Downloadable!] Larry Karp & Jiangfeng Zhang, 2003.
"Regulation of Stock Externalities with Correlated Costs ,"
Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series
892R, Department of Agricultural & Resource Economics, UC Berkeley.
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Carlos Chávez & John Stranlund, 2009.
"A Note on Emissions Taxes and Incomplete Information ,"
Environmental & Resource Economics ,
European Association of Environmental and Resource Economists, vol. 44(1), pages 137-144, September.
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Torstein Bye and Annegrete Bruvoll, 2008.
"Multiple instruments to change energy behaviour: The emperor’s new clothes? ,"
Discussion Papers
549, Research Department of Statistics Norway.
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Larry Karp & Jinhua Zhao, 2007.
"A Proposal to Reform the Kyoto Protocol: the Role of Escape Clauses and Foresight ,"
Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series
1050, Department of Agricultural & Resource Economics, UC Berkeley.
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Thomas Aronsson & Sören Blomquist, 2003.
"On Environmental Taxation under Uncertain Environmental Damage ,"
Environmental & Resource Economics ,
European Association of Environmental and Resource Economists, vol. 24(2), pages 183-196, February.
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Sonja Peterson, 2004.
"The Contribution of Economics to the Analysis of Climate Change and Uncertainty: A Survey of Approaches and Findings ,"
Kiel Working Papers
1212, Kiel Institute for the World Economy.
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Vetter, Henrik, 2000.
"Prices vs. Quantities in Monopolistic Competition ,"
Unit of Economics Working papers
24203, Royal Veterinary and Agricultural University, Food and Resource Economic Institute.
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Pizer, William & Newell, Richard & Zhang, Jiangfeng, 2003.
"Managing Permit Markets to Stabilize Prices ,"
Discussion Papers
dp-03-34, Resources For the Future.
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Other versions: Michael Hoel & Larry Karp, 2001.
"Taxes versus Quotas for a Stock Pollutant ,"
Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series
855, Department of Agricultural & Resource Economics, UC Berkeley.
[Downloadable!]
Other versions:
Hoel, Michael & Karp, Larry S., 1999.
"Taxes versus quotas for a stock pollutant ,"
CUDARE Working Paper Series
855, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy, revised 1999.
Hoel, Michael & Karp, Larry, 2002.
"Taxes versus quotas for a stock pollutant ,"
Resource and Energy Economics ,
Elsevier, vol. 24(4), pages 367-384, November.
[Downloadable!] (restricted) Bernardo Moreno Jiménez & José Luis Torres Chacón, 2005.
"Output subsidies and quotas under uncertainty and firm heterogeneity ,"
Economic Working Papers at Centro de Estudios Andaluces
E2005/24, Centro de Estudios Andaluces.
[Downloadable!]
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