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.

This paper investigates optimal emissions taxation under imperfect competition in a durable good industry, where products are sold (instead of rented). As a benchmark, attention is paid to the special case of monopoly with exogenously given product durability. In line with previous literature,...