Taxes and quotas for a Stock Pollutant with Multiplicative Uncertainty: A Comment

Fidel Gonzalez ()
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Fidel Gonzalez: Economics Centro de Investigacion y Docencia Economica

No 364, Computing in Economics and Finance 2005 from Society for Computational Economics

Abstract: In this essay, it is shown that in the Hoel and Karp (2001) model of global warming, the optimal response of taxes for a stock pollutant with mutiplicative uncertainty is opposite when the control variable is pollution taxes instead of emissions. In this case, the election of control variable implies different information assumptions about the firm's reaction to emission taxes. The results in both cases are driven by the nature of the policy maker´s preferences

Keywords: Pollution Control; Multiplicative Disturbances; Stochastic Control (search for similar items in EconPapers)
JEL-codes: C61 H21 Q28 (search for similar items in EconPapers)
Date: 2005-11-11
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Persistent link: https://EconPapers.repec.org/RePEc:sce:scecf5:364

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