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Weitzman revisited: Emission standards vs. taxes with uncertain control costs and market power of polluting firms

Author

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  • Clemens Heuson

Abstract

It is well known that uncertainty concerning firms’ costs as well as market power of the latter have to be taken into account in order to design and choose environmental policy instruments in an optimal way. As a matter of fact, in most actual regulation settings the policy maker has to face both of these complications simultaneously. However, hitherto environmental economic theory has restricted to either of them when submitting conventional policy instruments to a comparative analysis. The article at hand takes a first step in closing this gap. It investigates the welfare effects of emission standards and taxes against the background of uncertain emission control costs and various degrees of the polluting firms’ market power.

Suggested Citation

  • Clemens Heuson, 2008. "Weitzman revisited: Emission standards vs. taxes with uncertain control costs and market power of polluting firms," Discussion Paper Series 299, Universitaet Augsburg, Institute for Economics.
    • Handle: RePEc:aug:augsbe:0299
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    File URL: https://opus.bibliothek.uni-augsburg.de/opus4/files/71135/299.pdf
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    Cited by:

    1. Fabio Antoniou & Nikos Tsakiris, 2016. "On the Informational Superiority of Quantities Over Prices in the Presence of an Externality," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(1), pages 227-250, September.
    2. Clemens Heuson, 2008. "Emission standards vs. taxes: The case of asymmetric Cournot duopoly and uncertain control costs," Discussion Paper Series 300, Universitaet Augsburg, Institute for Economics.

    More about this item

    Keywords

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    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D89 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Other
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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