This paper examines the strategic behavior of firms under emissions taxes and tradable emissions permits designed to mitigate phosphorus emissions. The Nash payoff to the regulator of the strategic game is determined for a sub-basin of the Minnesota River using econometric estimates of cost and...

Environmental regulators often have imperfect information about regulated firms' abatement costs. In this paper we compare taxes and emissions permits in a dynamic setting in which firms behave strategically. The regulator updates policy over time based upon previous aggregate industry...