Taxes, Permits and Costly Policy Response to Technological Change

Jessica Coria and Magnus Hennlock (magnus.hennlock@economics.gu.se)
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Magnus Hennlock: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG

No 442, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: In this paper we analyze the e ects of the choice of price (taxes) versus quantity (tradable permits) instruments on the policy response to technological change. We show that if policy responses incur transactional and political adjustment costs, environmental targets are less likely to be adjusted under tradable per- mits than under emission taxes. This implies that the total level of abatement over time might remain unchanged under tradable permits while it will increase under emission taxes.

Keywords: Environmental Taxes; Tradable Permits; Technology Adoption; Policy Adjustment; Regulatory Costs (search for similar items in EconPapers)
JEL-codes: H82 O32 O33 Q52 Q55 Q58 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2010-05-10
New Economics Papers: this item is included in nep-ene and nep-env
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Citations: View citations in EconPapers (4)

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http://hdl.handle.net/2077/22337 (text/html)

Related works:
Journal Article: Taxes, permits and costly policy response to technological change (2012)
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