Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/24182
Authors: 
Breitscheidel, Jörg
Year of Publication: 
2005
Series/Report no.: 
ZEW Discussion Papers 05-86
Abstract: 
We explore the design of self-financing tax-subsidy schemes to solve hold-up problems in environmental regulation. The announcement of the tax rate seems to be preferable to solve hold-up problems with respect to the investment in environmental R&D. In contrast, only the announcement of the subsidy rate is adequate to solve hold-up problems with respect to the licensing of environmentally friendly technologies. Altogether, the announcement of the subsidy rate yields higher expected social welfare than the announcement of the tax rate or the standard emission taxation if the marginal damage of emissions exceeds a certain level.
Subjects: 
Hold-up problems
Environmental regulation
Taxes and subsidies
Selffinancing mechanisms
Emission control
JEL: 
D43
Q28
L50
D62
Document Type: 
Working Paper

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