Clemens Heuson
Emission standards vs. taxes: The case of
asymmetric Cournot duopoly and uncertain control costs
Abstract:
It is well known that uncertainty concerning firms’ costs as
well as market power of the latter have to be taken into account in
order to design and choose environmental policy instruments in an
optimal way. As a matter of fact, in the most actual environmental
regulation settings the policy maker has to face both of these
complications simultaneously. However, hitherto environmental economic
theory has restricted itself to either of them when submitting
conventional policy instruments to a comparative analysis. The article
at hand accounts for closing this gap by investigating the welfare
effects of emission standards and taxes against the background of
uncertain emission control costs and a polluting asymmetric Cournot
duopoly.
JEL: D62, D89, L13, Q58
Paper:
Paper available as pdf-file.
Beitrag Nr. 300, Volkswirtschaftliche Diskussionsreihe, Institut
für
Volkswirtschaftslehre der Universität Augsburg
Contact:
Clemens
Heuson
v.
K., 17.03.2008