Abrego, Lisandro and Perroni, Carlo (1999) Investment subsidies and time-consistent environmental policy. Working Paper. Coventry: University of Warwick, Department of Economics. (Warwick economic research papers.

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Abstract

We describe a model of dynamic poluution abatement choices with heterogeneous agents, where, due to the presence of a distributional objective and to the absence of incentive-compatible compensation mechanisms, the choice of a second-best level of emission taxation is time-inconsistent. In this model, we investigate whether investment subsidies can act as a substitute for policy commitment.

Item Type:	Working or Discussion Paper (Working Paper)
Subjects:	H Social Sciences > HJ Public Finance
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	Pollution -- Taxation, Environmental impact charges, Pollution prevention, Investments
Series Name:	Warwick economic research papers
Publisher:	University of Warwick, Department of Economics
Place of Publication:	Coventry
Date:	June 1999
Number:	No.533
Number of Pages:	22
Status:	Not Peer Reviewed
Access rights to Published version:	Open Access
Description:	First draft, December 1997; this version, June 1999
Funder:	Economic and Social Research Council (Great Britain) (ESRC)
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URI:	http://wrap.warwick.ac.uk/id/eprint/1646

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