Investment Subsidies and Time-Consistent Environmental Policy
AbstractWe describe a model of dynamic pollution abatement choices with heterogeneous agents, where, due to the presence of a distributional objective and to the absence of incentive-compatible compensation mechanisms, the choice of a second-best level of emission taxation is time-inconsistent. In this model, we investigate whether investment subsidies can act as a substitute for policy commitment.
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Other versions of this item:
- Lisandro Abrego & Carlo Perroni, 2002. "Investment subsidies and Time-Consistent Environmental Policy," Oxford Economic Papers, Oxford University Press, vol. 54(4), pages 617-635, October.
- Abrego, Lisandro & Perroni, Carlo, 1999. "Investment Subsidies and Time-Consistent Environmental Policy," The Warwick Economics Research Paper Series (TWERPS) 533, University of Warwick, Department of Economics.
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-05-08 (All new papers)
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