Show that a pollution tax on emissions and a subsidy to output producers for each unit of
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Show that a pollution tax on emissions and a subsidy to output producers for each unit of pollution reduction would, if the rates of subsidy were identical to the pollution tax rate, lead to identical outcomes in terms of the levels of output and pollution for a given sized industry. Explain why the distribution of gains and losses will usually differ, and why the long-run level of pollution abatement may differ when the industry size may change.
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Natural Resource And Environmental Economics
ISBN: 9780273655596
3rd Edition
Authors: Roger Perman, Yue Ma, Michael Common, David Maddison, James Mcgilvray
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