 Environmental policies in the presence of more than one externality and of strategic firmsJournal of Environmental Planning and Management, 2022, vol. 65, issue 1, 168-185 Abstract: We first study the optimality of a committed policy mix of tax and subsidy to control pollution when firms are involved in abatement technology R&D that is subject to knowledge spillovers. Then a comparison of tax and subsidy is provided when the policy mix is not available and the regulator can use only one single policy. Two different behavioral assumptions for the firms are examined: when firms are myopic, and when they are strategic, i.e. react to the ex-ante committed policies strategically. The results suggest that using a policy mix the committed regulator can attain optimality if firms are myopic, however, a strategic reaction from the firms may compromise the efficiency of the policy mix. We also show that when the policy mix is not available to the regulator and they have to commit to only one single policy, then tax policy may have some advantages over subsidy. Moreover, our results suggest that unlike the policy mix, the single policy is more effective in the case of strategic firms rather than myopic ones. Date: 2022 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:jenpmg:v:65:y:2022:i:1:p:168-185 Ordering information: This journal article can be ordered from DOI: 10.1080/09640568.2021.1880380 Access Statistics for this article Journal of Environmental Planning and Management is currently edited by Dr Neil Powe, Dr Ken Willis and George Bill Page More articles in Journal of Environmental Planning and Management from Taylor & Francis Journals |
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