Prices versus Quantities versus Hybrids in the Presence of Co-pollutants

John Stranlund () and Insung Son

No 205422, 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California from Agricultural and Applied Economics Association

Abstract: We investigate the optimal regulation of a pollutant given its interaction with another controlled pollutant under asymmetric information about firms’ abatement costs. The co-pollutant is regulated, but perhaps not efficiently. Our focus is on optimal instrument choice in this setting, and we derive rules for determining whether a pollutant should be regulated with an emissions tax, tradable permits, or a hybrid price and quantity policy, given the regulation of its co-pollutant. The policy choices depend on the relative slopes of the damage functions for both pollutants and the aggregate marginal abatement cost function, including whether the pollutants are complements or substitutes in abatement and whether the co-pollutant is controlled with a tax or tradable permits.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 44
Date: 2015
New Economics Papers: this item is included in nep-ene, nep-env and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://ageconsearch.umn.edu/record/205422/files/P ... _AAEA_Submission.pdf (application/pdf)

Related works:
Journal Article: Prices Versus Quantities Versus Hybrids in the Presence of Co-pollutants (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea15:205422

DOI: 10.22004/ag.econ.205422

Access Statistics for this paper

More papers in 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California from Agricultural and Applied Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().