model, I show that a subsidy on input factors in a Cobb-Douglas production function may contribute substantially to …

tax on pollution and a subsidy on abatement activity. We help elucidate this policy choice by exploring the tax-subsidy … financing the tax or subsidy. We solve the model numerically based on Chinese data. We find that if revenue-recycling via lump … for the distribution of income between wages and profits) as an equivalent abatement subsidy. The move from recycling to …

. We, first, derive analytically the optimal subsidy in a spatial partial equilibrium model of a city with two zones where … vehicles and electric vehicles. There we find that the optimal subsidy rate is the sum of changes in externality costs … simulations to calculate sign and size of the optimal subsidy or tax rate. This model is calibrated to a typical German …