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Heterogeneity in Costs and Second-Best Policies for Environmental Protection AgEcon
Burtraw, Dallas; Cannon, Matthew.
This paper investigates heterogeneity in pollution abatement costs using a computable general equilibrium framework. Previous literature using aggregated data has found that "grandfathered" tradable permits are dominated by other instruments including emission taxes, performance standards, and technology mandates because of interactions with pre-existing taxes. However, when the underlying costs of abatement are heterogeneous, a disaggregate representation of costs yields qualitatively different findings. In a disaggregate model of NOX abatement in the United States, the relative performance of tradable permits improves significantly and out-performs command and control approaches over a wide range of emission reductions.
Tipo: Working or Discussion Paper Palavras-chave: Cost-effectiveness analysis; General equilibrium; Environmental policy; Instrument choice; Second-best regulation; Environmental Economics and Policy; D58; H21; L51.
Ano: 2000 URL: http://purl.umn.edu/10875
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The Cost-Effectiveness of Alternative Instruments for Environmental Protection in a Second-Best Setting AgEcon
Goulder, Lawrence H.; Parry, Ian W.H.; Williams, Roberton C., III; Burtraw, Dallas.
This paper employs analytical and numerical general equilibrium models to examine the costs of achieving pollution reductions under a range of environmental policy instruments in a second-best setting with pre-existing factor taxes. We compare the costs and overall efficiency impacts of emissions taxes, emissions quotas, fuels taxes, performance standards, and mandated technologies, and explore how costs change with the magnitude of pre-existing taxes and the extent of pollution abatement. We find that the presence of distortionary taxes raises the costs of pollution abatement under each instrument relative to its costs in a first-best world. This extra cost is an increasing function of the magnitude of pre-existing tax rates. For plausible values of...
Tipo: Working or Discussion Paper Palavras-chave: General equilibrium efficiency analysis; Environmental instrument choice; Second-best regulation; Environmental Economics and Policy; D58; H21; L51.
Ano: 1998 URL: http://purl.umn.edu/10522
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