Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/192198 
Authors: 
Year of Publication: 
1998
Series/Report no.: 
Discussion Papers No. 214
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
This paper demonstrates that voluntary agreements between a regulator and an industry can be Pareto superior to environmental taxes. Further, such agreements may differ from direct regulation in a non-trivial way. The first-best optimum may be included in the set of possible agreements, even if it is not attainable using tax instruments. There is no uncertainty or asymmetric information in the model. However, it is assumed that some emissions are observable, but not verifiable. This may be interpreted as a situation where precise formal specification of the pollutant is infeasible.
Subjects: 
Voluntary agreements
Second-best tax
Non-verifiability
JEL: 
H21
L52
Q28
Document Type: 
Working Paper

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