Open AccessThe Pigouvian Tax Rule in the Presence of an Eco-Industry
Author(s) -
Bernard SinclairDésgagné,
AlainDésiré Nimubona
Publication year - 2005
Publication title -
ssrn electronic journal
Language(s) - English
Resource type - Journals
ISSN - 1556-5068
DOI - 10.2139/ssrn.705183
Subject(s) - economics , context (archaeology) , pollution , microeconomics , natural resource economics , market power , goods and services , externality , marginal cost , public economics , market economy , ecology , paleontology , biology , monopoly
Pollution abatement goods and services are now largely being delivered by a specialized "eco-industry." This note reconsiders Pigouvian taxes in this context. We find that the optimal emission tax will depart from the marginal social cost of pollution according to the polluters' and the environment firms' relative market power.
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