Environmental regulation of technically inefficient firms

Bruno Wichmann

Economics Letters, 2013, vol. 121, issue 2, 143-147

Abstract: This paper presents a model in which a technically inefficient firm is responsible for the emissions of pollutants. We derive second-best regulatory schemes (tax and quota) assuming that the firm’s technical efficiency is unknown to the regulator.

Keywords: Technical efficiency; Asymmetric information; Tax; Quota; Second-best regulation (search for similar items in EconPapers)
JEL-codes: D62 D82 H23 L51 (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:121:y:2013:i:2:p:143-147

DOI: 10.1016/j.econlet.2013.08.010

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