In this paper we investigate environmental regulation by taxes and quotas in the context of a monopolistically competitive industry. Firstly, we find the combination of a quota and a tax supporting the first best solution. Secondly, we explain why the allocative equivalence between the two...

One way to integrate environmental concerns into the European agricultural policy is to let the agricultural income support be contingent on the farmer's environmental performance. With asymmetric information concerning relevant parameters like the individual farmer's cost of supplying...