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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/18992
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| Title: | | Self-financing environmental mechanisms  |
| Authors: | | Breitscheidel, Jörg Gersbach, Hans |
| Issue Date: | | 2005 |
| Series/Report no.: | | CESifo working papers 1528 |
| Abstract: | | We explore the design of self-financing tax/subsidy mechanisms to solve hold-up problems in environmental regulation. Under Cournot competition, announcing the subsidy rate seems to be preferable to announcing the tax rate. Moreover, for constant marginal damage the hold-up problem can always be solved by setting subsidies. Under Bertrand competition, only announcing the tax rate can induce at least one firm to invest. We suggest that feebate systems in the automotive sector should be designed as self-financing tax/subsidy mechanisms. |
| Subjects: | | hold-up problems environmental regulation taxes and subsidies self-financing mechanisms emission control |
| JEL: | | D43 Q28 L50 D62 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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