The response of a monopolistic polluter to the imposition of an emission tax and its welfare implications are examined. The cases of output reduction as the sole means for pollution control and of additional means being feasible are considered. It turns out that in the second case the tax may...

This paper analyzes the output, abatement, and investment decisions made by a monopolistic polluter under environmental liability law. The model applied considers both integrated and end-of-pipe abatement technologies. We find that in the case of fixed technology, in many instances negligence...