Abstract
Several recent papers show that different combinations of taxes and subsidies can achieve the social optimum for green design and household waste management when there are various market failures. This note shows that such policy flexibility exists only if all relevant actions by individual agents can be properly targeted by economic instruments. If the household can make a private effort to reduce waste, then an optimal policy is shown to be a unique combination of given economic instruments.
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REFERENCES
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Choe, C., Fraser, I. On the Flexibility of Optimal Policies for Green Design. Environmental and Resource Economics 18, 367–371 (2001). https://doi.org/10.1023/A:1011170816440
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DOI: https://doi.org/10.1023/A:1011170816440