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Comparing Policy Instruments in a Dynamic Environment with Strategic Firms: The Case of Minnesota Phosphorus Emissions

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  • Moledina, Amyaz A.

Abstract

This paper examines the strategic behavior of firms under emissions taxes and tradable emissions permits designed to mitigate phosphorus emissions. The Nash payoff to the regulator of the strategic game is determined for a sub-basin of the Minnesota River using econometric estimates of cost and benefit functions representative of the region. These payoffs are compared to determine the preferred policy instrument. Results show that emission permits yield lower deadweight losses than emissions taxes.

Suggested Citation

  • Moledina, Amyaz A., 2001. "Comparing Policy Instruments in a Dynamic Environment with Strategic Firms: The Case of Minnesota Phosphorus Emissions," 2001 Annual meeting, August 5-8, Chicago, IL 20751, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea01:20751
    DOI: 10.22004/ag.econ.20751
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    References listed on IDEAS

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