Many conservation programs offer financial compensation to farmers in exchange for socially desired services, such as soil conservation or biodiversity protection. Realization of the conservation objective at minimum cost requires payments to just cover the extra costs incurred by each...

Investment subsidies are widely used to induce adoption of new technologies that can lower the (marginal) cost of reducing emissions. To economize on these subsidies, governments would like to distinguish between firms that need to receive a subsidy to adopt a new technology, and firms that...