Abstract
We consider the design of ambient taxes forrisk-neutral and risk-averse polluters whenpolluters and the regulatory agency haveasymmetric information about environmentalrelationships and probabilities associatedwith random events. Unlike prior work, we showthat under these conditions, optimal ambienttaxes must be firm-specific, and accompaniedby additional incentives to influencepolluters' choices of abatement techniques.
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Horan, R.D., Shortle, J.S. & Abler, D.G. Ambient Taxes Under m-Dimensional Choice Sets, Heterogeneous Expectations, and Risk-Aversion. Environmental and Resource Economics 21, 189–202 (2002). https://doi.org/10.1023/A:1014584418846
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DOI: https://doi.org/10.1023/A:1014584418846