We examine information provision as a public policy instrument when products generate damages to consumers as well as environmental externalities. We show that information provision dominates taxation in terms of welfare, if information can be provided at low cost. This is because a uniform tax...

We examine information provision as a public policy instrument when products generate damages to consumers as well as environmental externalities. We show that information provision dominates taxation in terms of welfare, if information can be provided at low cost. This is because a uniform tax...

Emissions taxes, tradeable emission permits and voluntary compliance policies are becoming the instruments of choice in controlling environmental problems at the national and international level. Careful design of these policies in second-best environments is a very important factor for their...