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Self-Selection and Optimal Nonlinear Effluent Charges

Author

Listed:
  • Sang-Ho Lee
  • Iltae Kim

Abstract

This paper proposes an optimal nonlinear effluent-charge system forenvironmental pollution control. This system achieves the first-bestoptimum through a self-selecting mechanism under asymmetric information.The proposed system can also control the level of revenues so as to reducethe excess burden of environmental taxation, and discriminate among thepolluters. The paper also compares this system with the conventional lineareffluent-charge system and discusses some economic implications ofimplementing the system. Copyright Kluwer Academic Publishers 2000

Suggested Citation

  • Sang-Ho Lee & Iltae Kim, 2000. "Self-Selection and Optimal Nonlinear Effluent Charges," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 16(1), pages 1-14, May.
  • Handle: RePEc:kap:enreec:v:16:y:2000:i:1:p:1-14
    DOI: 10.1023/A:1008376823547
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    References listed on IDEAS

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    1. de Bovenberg, A Lans & Mooij, Ruud A, 1994. "Environmental Levies and Distortionary Taxation," American Economic Review, American Economic Association, vol. 84(4), pages 1085-1089, September.
    2. Fullerton, Don, 1997. "Environmental Levies and Distortionary Taxes: Comment," American Economic Review, American Economic Association, vol. 87(1), pages 245-251, March.
    3. Srinagesh, Padmanabhan & Bradburd, Ralph M, 1989. "Quality Distortion by a Discriminating Monopolist," American Economic Review, American Economic Association, vol. 79(1), pages 96-105, March.
    4. Lee, Dwight R. & Misiolek, Walter S., 1986. "Substituting pollution taxation for general taxation: Some implications for efficiency in pollutions taxation," Journal of Environmental Economics and Management, Elsevier, vol. 13(4), pages 338-347, December.
    5. Terkla, David, 1984. "The efficiency value of effluent tax revenues," Journal of Environmental Economics and Management, Elsevier, vol. 11(2), pages 107-123, June.
    6. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
    7. Parry Ian W. H., 1995. "Pollution Taxes and Revenue Recycling," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages 64-77, November.
    8. Don Fullerton & Gilbert E. Metcalf, 1997. "Environmental Taxes and the Double Dividends Hypothesis: Did You Really Expect Something for Nothing?," Discussion Papers Series, Department of Economics, Tufts University 9706, Department of Economics, Tufts University.
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    Cited by:

    1. Yochanan Shachmurove & Reuel Shinnar (Deceased), 2012. "Do Chemical Reactors Hold the Solution for Global Economic Crises?," PIER Working Paper Archive 12-010, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.

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