Although gasoline taxes are widely used (nearly) efficient CO2 emission controls, additional fuel-efficiency regulation is applied e.g. in the USA and in Europe. In a simple analytical model, we specify the welfare implications of (i) gasoline taxes, (ii) of 'gas-guzzler taxes' (iii) of...

A small open economy operates a carbon emission trading scheme and subsidizes green energy. Taking cap-and-trade as given, we seek to explain the subsidy as the outcome of a trilateral tug of war between the "green" energy industry, the "black" energy industry and consumers. With parametric...