On reducing the windfall profits in environmental subsidy programs

Carmen Arguedas () and Daan van Soest ()

Journal of Environmental Economics and Management, 2009, vol. 58, issue 2, pages 192-205

Abstract: Investment subsidies are widely used to induce adoption of new technologies that can lower the (marginal) cost of reducing emissions. To economize on these subsidies, governments would like to distinguish between firms that need to receive a subsidy to adopt a new technology, and firms that would adopt that technology even without subsidies. We show that policies consisting of a menu of emission taxes and investment subsidies can potentially induce firms to self-select.

Keywords: Investment; subsidies; Environmental; policy; Abatement; technology; adoption; Asymmetric; information (search for similar items in EconPapers)
Date: 2009

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Persistent link: http://EconPapers.repec.org/RePEc:eee:jeeman:v:58:y:2009:i:2:p:192-205

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