Investment Subsidies and Time-Consistent Environmental Policy

We describe a model of dynamic pollution abatement choices with heterogeneous agents, where, due to the presence of a distributional objective and to the absence of incentive-compatible compensation mechanisms, the choice of a second-best level of emission taxation is time-inconsistent. In this model, we investigate whether investment subsidies can act as a substitute for policy commitment.

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Year of publication:	1999
Authors:	Abrego, Lisandro ; Perroni, Carlo
Institutions:	Department of Economics, University of Warwick
Subject:	Pollution Abatement \| Emission Taxes \| Investment Subsidies

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Series:	The Warwick Economics Research Paper Series (TWERPS).
Type of publication:	Book / Working Paper
Language:	English
Notes:	22 pages
Classification:	H2 - Taxation, Subsidies, and Revenue ; Q3 - Nonrenewable Resources and Conservation
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005747126