Developed countries are responsible for a great share of the historical carbon dioxide (CO2) emissions in the atmosphere. The need to reduce CO2 emissions is now widely accepted, but how this can be accomplished is still controversial and debated. Considering the growing size of the carbon...

The paper studies the use of emission taxes and feed-in subsidies for the regulation of a monopoly that can produce the same good with a technology that employs a polluting input and a clean technology. In the first part of the paper, we show that the efficient solution can be implemented...

The paper studies the use of emission taxes and feed-in subsidies for the regulation of a monopoly that can produce the same good with a technology that employs a polluting input and a clean technology. The second-best tax and subsidy are calculated solving a two-stage policy game between the...