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revenues. Additional revenues can be used to reduce the distortion of the rest of the tax system. Without uncertainty …, environmental taxes and auctioned permit schemes are equally appropriate. In the presence of uncertainty, however, the efficient … optimal choice of instruments in the presence of uncertainty. It shows that, although the revenue capacity effect generates …
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A simple model is used to illustrate the effects of a reduction in (marginal) abatement cost in a two country setting. It can be shown that a the country experiencing a cost reduction can actually be worse off. This holds true for a variety of quantity and price based emission policies. The most...
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