About Polluting Eco-Industries: Optimal Provision of Abatement Goods and Pigouvian Fees
Damien Sans (),
Sonia Schwartz () and
No 1453, AMSE Working Papers from Aix-Marseille School of Economics, France
In this article we introduce a polluting eco-industry. Depending on the level of the damage, we find one of two optimal equilibria. If the damage is low, we generalize the usual results of the economic literature to the polluting eco-industry: the dirty firm partially abates their emissions, only efficient eco-industry firms produce and the abatement level increases with the damage. However, we obtain very specific results if the damage is high. In this case, not all efficient eco-industry firms produce. The abatement level and the number of active eco-industry firms both decrease as the damage increases. We finally show that a well-designed Pigouvian tax implements these equilibria in a competitive economy.
Keywords: Polluting Eco-Industry; Heterogeneous Örms; Welfare Analysis; Pigouvian Tax (search for similar items in EconPapers)
JEL-codes: D62 L11 Q58 (search for similar items in EconPapers)
Pages: 23 pages
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Working Paper: About polluting eco-industries: optimal provision of abatement goods and Pigouvian fees (2017)
Working Paper: About Polluting Eco-Industries: Optimal Provision of Abatement Goods and Pigouvian Fees (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:aim:wpaimx:1453
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