Prices vs quantities with multiple pollutants

Stefan Ambec and Jessica Coria

Journal of Environmental Economics and Management, 2013, vol. 66, issue 1, 123-140

Abstract: We examine the choice of policy instruments (price, quantity or a mix of the two) when two pollutants are regulated and firms' abatement costs are private information. Whether abatement efforts are complements or substitutes is key determining the choice of policies. When pollutants are complements, a mixed policy instrument with a tax on one pollutant and a quota on another is sometimes preferable even if the pollutants are identical in terms of benefits and costs of abatement. Yet, if they are substitutes, the mixed policy is dominated by taxes or quotas.

Keywords: Pollution; Environmental regulation; Policy mixes; Tax; Emission standard; Asymmetric information (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (57)

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Related works:
Working Paper: Prices vs Quantities with Multiple Pollutants (2011)
Working Paper: Prices vs Quantities with Multiple Pollutants (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:66:y:2013:i:1:p:123-140

DOI: 10.1016/j.jeem.2012.11.002

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