Prices vs. Quantities with multiple pollutants

 

We examine the choice of policy instruments (price, quantity or a mix of the two) when two pollutants are regulated and firms' abatement costs are private information. The economies of scope between abatement efforts are a key parameter that affects the choice of policies: whether abatement efforts are substitutes or complements. When they are complements, a mixed policy instrument with a tax on one pollutant and a quota on another is sometimes preferable even if the pollutants are identical in terms of benefits and costs of abatement. Yet, if they are substitutes, the mixed policy is dominated by taxes or quotas.

 

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Presenter:

Jessica Coria
University of Gothenburg

 

 

Date:

 

 

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Venue:

Meeting Room 5.1, Level 5
School of Economics
Singapore Management University
90 Stamford Road
Singapore 178903

 

 

 

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