Pollution, Factor Ownerships, and Emission Taxes

Chorng-Jian Liu (), Chao-Cheng Mai (), Fu-Chuan Lai and Wen-Chung Guo

Atlantic Economic Journal, 2010, vol. 38, issue 2, 209-216

Abstract: This paper employs Cournot’s ( 1838 ) model of complementary goods to analyze the optimal emission taxation under joint and independent ownership with pollution. When the marginal damage is small (large), an emission taxation is unnecessary (necessary), because the quantity (environmental) distortion is more serious than the environmental (quantity) distortion. This finding has never been presented in the literature. In contrast to Cournot ( 1838 ), a striking result is that independent ownership may be welfare superior to joint ownership when the marginal damage of externality is large in the absence of governmental intervention. Copyright International Atlantic Economic Society 2010

Keywords: Emission taxation; Joint ownership; Independent ownership; Pollution; H23; L10 (search for similar items in EconPapers)
Date: 2010
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DOI: 10.1007/s11293-010-9213-7

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