Template-Type: ReDIF-Paper 1.0

Author-Name: Clemens Heuson
Author-X-Name-First: Clemens
Author-X-Name-Last: Heuson

Title: 	Weitzman revisited: Emission standards vs. taxes with uncertain control costs and market power of polluting firms
	
Abstract: It is well known that uncertainty concerning firms’ costs as well as market
power of the latter have to be taken into account in order to design and choose environmental
policy instruments in an optimal way. As a matter of fact, in most actual
regulation settings the policy maker has to face both of these complications simultaneously.
However, hitherto environmental economic theory has restricted to either of
them when submitting conventional policy instruments to a comparative analysis. The
article at hand takes a first step in closing this gap. It investigates the welfare effects of
emission standards and taxes against the background of uncertain emission control
costs and various degrees of the polluting firms’ market power.
Length:  30 pages
Creation-Date:  2008-03
File-URL: http://www.bgpe.de/texte/DP/044_heuson.pdf
File-Format: Application/pdf
File-Function: First version, 2008
Number: 044
Classification-JEL: D62, D89, L13, Q58
Keywords: Cournot oligopoly, external diseconomies of pollution, cost uncertainty, emission standard, emission tax
Handle: RePEc:bav:wpaper:044_heuson