We analyse two mechanism designs for refunding emission payments to polluting firms: output-based refunding (OBR) and expenditure-based refunding (EBR). In both instruments, emission fees are returned to the polluting industry, typically making the policy more politically acceptable than a...

Recommended readings (Machine generated): Roland Bénabou and Jean Tirole (2003), 'Intrinsic and Extrinsic Motivation', Review of Economic Studies, 70 (3), July, 489-520 -- Kjell Arne Brekke, Snorre Kverndokk and Karine Nyborg (2003), 'An Economic Model of Moral Motivation', Journal of Public...