inequality aversion and financing the subsidy is not too distortive …

). Using a structural model of supply and demand, we show that market power increases the welfare loss from subsidy targeting …

productive use, the economy wide marginal product of emissions falls with an increase in any subsidy, tending to decrease …

The standard theory that the first-best tax on pollution is equal to marginal environmental damages has been extended … transaction such as output or income and a subsidy to a different market transaction that is a clean alternative to pollution. It … each tax and subsidy in a general equilibrium model with other tax distortions, and we compare these to the rates in a …

Because of difficulties measuring pollution, many prior papers suggest a subsidy to some observable method of reducing … make an additional important point. In each case, we show that welfare under the suggested subsidy can be increased by the … addition of an output tax. While the suggested subsidy reduces damage per unit of output, it also decreases the firm's cost of …