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Regulating an Externality-Generating Utility Environmental Taxes Under Limited Information

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  • Henry van Egteren

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Abstract

Global warming is currently an important item on most nationalenvironmental agendas. In many countries, coal-fired electricity generatingstations represent an important source of greenhouse gases. We examinehow regulations to curb emissions affect public utility pricing regulationwhen regulators act non-cooperatively. We show that, when there is limitedinformation on fixed abatement costs, an environmental regulator prefersan emission tax over an output tax or a lump sum environmental tax. Thepublic utility regulator prefers the lump sum tax regime. Copyright Kluwer Academic Publishers 2002

Suggested Citation

  • Henry van Egteren, 2002. "Regulating an Externality-Generating Utility Environmental Taxes Under Limited Information," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 21(2), pages 107-133, February.
  • Handle: RePEc:kap:enreec:v:21:y:2002:i:2:p:107-133
    DOI: 10.1023/A:1014521221896
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    References listed on IDEAS

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    1. Baron, David P., 1985. "Regulation of prices and pollution under incomplete information," Journal of Public Economics, Elsevier, vol. 28(2), pages 211-231, November.
    2. Schmutzler, Armin & Goulder, Lawrence H., 1997. "The Choice between Emission Taxes and Output Taxes under Imperfect Monitoring," Journal of Environmental Economics and Management, Elsevier, vol. 32(1), pages 51-64, January.
    3. Dixit, Avinash & Grossman, Gene M & Helpman, Elhanan, 1997. "Common Agency and Coordination: General Theory and Application to Government Policy Making," Journal of Political Economy, University of Chicago Press, vol. 105(4), pages 752-769, August.
    4. Hoel, Michael, 1998. " Emission Taxes versus Other Environmental Policies," Scandinavian Journal of Economics, Wiley Blackwell, vol. 100(1), pages 79-104, March.
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    Cited by:

    1. Zhu, Qinghua & Geng, Yong & Sarkis, Joseph, 2016. "Shifting Chinese organizational responses to evolving greening pressures," Ecological Economics, Elsevier, vol. 121(C), pages 65-74.
    2. Schmidt, Robert & Pollrich, Martin & Stiel, Caroline, 2013. "An optimal incentive contract to avert firm relocation under unilateral environmental regulation," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79741, Verein für Socialpolitik / German Economic Association.

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