, when a Pigouvian tax on conventional fuels such as crude is in place, the optimal biofuel subsidy is zero. When the tax on … crude is not available as a policy option, however, a second-best biofuel subsidy (or tax) is optimal. In the large …-country case, the optimal tax on crude departs from its standard Pigouvian level and a biofuel subsidy is optimal. A biofuel …

presented in which the developed country takes a leadership role to institute a tax-subsidy combination to discourage (encourage …

, when a Pigouvian tax on conventional fuels such as crude is in place, the optimal biofuel subsidy is zero. When the tax on … crude is not available as a policy option, however, a second-best biofuel subsidy (or tax) is optimal. In the large …-country case, the optimal tax on crude departs from its standard Pigouvian level and a biofuel subsidy is optimal. A biofuel …

not available as a policy option, a second-best biofuel subsidy may or may not be positive. In the large-country case, the … subsidy for the food exporter. Finally, we show that when both nations engage in biofuel policies, the terms-of-trade effects … encourage the Nash equilibrium subsidy to be positive (negative) for the food exporting (importing) nation …

, when a Pigouvian tax on conventional fuels such as crude is in place, the optimal biofuel subsidy is zero. When the tax on … crude is not available as a policy option, however, a second-best biofuel subsidy (or tax) is optimal. In the large …-country case, the optimal tax on crude departs from its standard Pigouvian level and a biofuel subsidy is optimal. A biofuel …