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Controlling Urban Air Pollution Caused by Households: Uncertainty, Prices, and Income

Author

Listed:
  • Carlos Chávez

    () (Departamento de Economía, Universidad de Concepción)

  • John K. Stranlund

    (Department of Resource Economics, University of Massachusetts - Amherst)

  • Walter Gómez

    (Departamento de Ingeniería Matemática, Universidad de la Frontera)

Abstract

We examine the control of air pollution caused by households burning wood for heating and cooking in the developing world. Since the problem is one of controlling emissions from nonpoint sources, regulations are likely to be directed at household choices of wood consumption and combustion technologies. Moreover, these choices are subtractions from, or contributions to, the pure public good of air quality. Consequently, the efficient policy design is not independent of the distribution of household income. Since it is unrealistic to assume that environmental authorities can make lump sum income transfers part of control policies, efficient control of air pollution caused by wood consumption entails a higher tax on wood consumption and a higher subsidy for more efficient combustion technologies for higher income households. Among other difficulties, implementing a policy to promote the adoption of cleaner combustion technologies must overcome the seemingly paradoxical result that efficient control calls for higher technology subsidies for higher income households.
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Suggested Citation

  • Carlos Chávez & John K. Stranlund & Walter Gómez, 2010. "Controlling Urban Air Pollution Caused by Households: Uncertainty, Prices, and Income," Working Papers 04-2010, Departamento de Economía, Universidad de Concepción.
  • Handle: RePEc:cnc:wpaper:04-2010
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    References listed on IDEAS

    as
    1. Malik, Arun S, 1992. "Enforcement Costs and the Choice of Policy Instruments for Controlling Pollution," Economic Inquiry, Western Economic Association International, vol. 30(4), pages 714-721, October.
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    3. Kling, Catherine L. & Innes, Robert & Rubin, Jonathan, 1992. "Emission Permits Under Monopoly," Staff General Research Papers Archive 1607, Iowa State University, Department of Economics.
    4. Hege Westskog, 1996. "Market Power in a System of Tradeable CO2 Quotas," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 85-103.
    5. Harford, Jon D., 1987. "Self-reporting of pollution and the firm's behavior under imperfectly enforceable regulations," Journal of Environmental Economics and Management, Elsevier, vol. 14(3), pages 293-303, September.
    6. Lyon, Randolph M., 1986. "Equilibrium properties of auctions and alternative procedures for allocating transferable permits," Journal of Environmental Economics and Management, Elsevier, vol. 13(2), pages 129-152, June.
    7. Stranlund, John K & Chavez, Carlos A, 2000. "Effective Enforcement of a Transferable Emissions Permit System with a Self-Reporting Requirement," Journal of Regulatory Economics, Springer, vol. 18(2), pages 113-131, September.
    8. Malik, Arun S., 1990. "Markets for pollution control when firms are noncompliant," Journal of Environmental Economics and Management, Elsevier, vol. 18(2), pages 97-106, March.
    9. Joskow, Paul L & Schmalensee, Richard & Bailey, Elizabeth M, 1998. "The Market for Sulfur Dioxide Emissions," American Economic Review, American Economic Association, vol. 88(4), pages 669-685, September.
    10. Keeler, Andrew G., 1991. "Noncompliant firms in transferable discharge permit markets: Some extensions," Journal of Environmental Economics and Management, Elsevier, vol. 21(2), pages 180-189, September.
    11. Robert W. Hahn, 1984. "Market Power and Transferable Property Rights," The Quarterly Journal of Economics, Oxford University Press, vol. 99(4), pages 753-765.
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    More about this item

    Keywords

    : Efficiency; urban air pollution; nonpoint pollution; environmental policy; uncertainty;

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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