This note corrects an error in the analysis of Goering/Boyce (1999) and extends their results. In this way, it refutes the claim that the durability of rented products plays a decisive role for the second-best emission taxation under imperfect competition.

For a durable consumption good which turns into waste after consumption, the socially optimal durability increases with an increase in the marginal environmental damage. In a laissez-faire equilibrium under perfect competition, producers fail to provide an efficient product design, i.e....