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Pigouvian Tax, Abatement Policies and Uncertainty on the Environment

Mario Menegatti and D. Baiardi ()

No 2010-EP04, Economics Department Working Papers from Department of Economics, Parma University (Italy)

Abstract: The paper examines the effects of environmental uncertainty on Pigouvian tax and abatement policy used, either separately or contemporaneously, to counteract pollution. We discuss uncertainty in three aspects: environmental quality, pollution effect and the impact of abatement. For each case we determine the conditions ensuring that uncertainty increases the size of public intervention and provide an economic interpretation and some parallelisms with other risk problems. The last part of the paper generalizes some of our results to the case of N-th order risk changes.

Keywords: Pigouvian tax; Abatement policies; Environment; Uncertainty; Bivariate utility (search for similar items in EconPapers)
JEL-codes: D81 H23 Q5 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2010
New Economics Papers: this item is included in nep-ene, nep-env, nep-pub, nep-reg and nep-upt
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Citations: View citations in EconPapers (1)

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Journal Article: Pigouvian tax, abatement policies and uncertainty on the environment (2011) Downloads
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