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Environmental policy instruments and strategic restraint: caps versus taxes

Author

Listed:
  • Daniel Cardona

    (Universitat de les Illes Balears)

  • Jenny De Freitas

    (Universitat de les Illes Balears)

  • Antoni Rubí-Barceló

    (Universitat de les Illes Balears)

Abstract

In the debate about options for abatement of carbon dioxide emissions, two instruments are considered: a cap on emissions (a command-and-control instrument) and a tax on emissions (a market-based instrument). One of the arguments used in this debate is related to the political manipulation that interest-groups may promote under each of these two regulatory systems. This study compares the performance of caps and taxes when the choice of the policy-maker is sensitive to the pressure of lobbies.

Suggested Citation

  • Daniel Cardona & Jenny De Freitas & Antoni Rubí-Barceló, 2019. "Environmental policy instruments and strategic restraint: caps versus taxes," DEA Working Papers 90, Universitat de les Illes Balears, Departament d'Economía Aplicada.
    • Handle: RePEc:ubi:deawps:90
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    File URL: http://www.uib.es/depart/deaweb/deawp/pdf/w90.pdf
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    More about this item

    Keywords

    environmental regulation; taxes; caps; lobbying; strategic restraint.;
    All these keywords.

    JEL classification:

    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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