EconPapers    
Economics at your fingertips  
 

Regulating a Polluting Oligopoly: Emission Tax or Voluntary Agreement?

Maia David

Review of Development Economics, 2005, vol. 9, issue 4, 514-529

Abstract: This paper compares, in a polluting oligopoly, an emission tax and a form of environmental policy called voluntary agreement (VA). Here there are two ways of reducing pollution: output contraction and end‐of‐pipe abatement. Given the imperfect competition, firms’ reaction to the tax is sub‐optimal. They reduce output excessively in order to raise the price and do not abate enough. The VA is a take‐it‐or‐leave‐it contract on abatement effort, offered to the firms with the threat of a tax. It has a limited effect on output and always allows higher abatement than the tax. We find that this kind of VA may be more efficient than the tax in a concentrated industry, when pollution is not too harmful and when the abatement technology is rather efficient and cheap.

Date: 2005
References: View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1111/j.1467-9361.2005.00291.x

Related works:
Working Paper: Regulating a Polluting Oligopoly: Emission Tax or Voluntary Agreement? (2005)
Working Paper: Regulating a Polluting Oligopoly: Emission Tax or Voluntary Agreement? (2004) Downloads
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:bla:rdevec:v:9:y:2005:i:4:p:514-529

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1363-6669

Access Statistics for this article

Review of Development Economics is currently edited by E. Kwan Choi

More articles in Review of Development Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2021-03-28
Handle: RePEc:bla:rdevec:v:9:y:2005:i:4:p:514-529