The Effects of Differentiated Emission Taxes
Extending the standard 2 x 2 Heckscher-Ohlin-Samuelson model to include emission as the third production factor, we consider the effects of emission taxes on outputs and the level of emission. The following results are derived. First, an increase in emission tax imposed on one industry may paradoxically increase the outputs of the industry. Second, an increase in emission tax imposed on one industry may raise the total level of emission.
|Date of creation:||Jan 2001|
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