Regulation of Nonpoint Pollution under the Emission and Output Taxes

• Main Authors: Tsung-Lin Tsai, 蔡宗麟
• Other Authors: Jin-Li Hu
• Format: Others
• Language: zh-TW
• Published: 1999
• Online Access: http://ndltd.ncl.edu.tw/handle/06949486105983585008

碩士 === 淡江大學 === 產業經濟學系 === 87 === As the economic development goes forward, the people emphasize the environmental much more than before. Therefore, the environmental regulation issue has become an important research and policy issue. Upon the nonpoint pollution, the government is not able to monitor the individual pollutant sources. Hence, an incentive scheme is needed to solve the free-riding problem in the presence of nonpoint pollution. The study of point pollution regulation is quite well developed. However, not all of the conclusions in the literature on point pollution may be applied to point pollution regulation. There is still a lack of combined economic instruments, enforcement cost, cooperative behavior of firms, oligopoly market structure, etc., in the existing literature of nonpoint pollution regulation. Therefore, in this article we compare the effects of emission and per unit output taxes on a duopoly's choice of output, pollution abatement, production technology type, etc. The information asymmetry arises from the private information of the production technology type. We assume the beliefs on the firms' environmental technology among the government and the duopolistic firms to be symmetric. Furthermore, it is assumed that cost functions are additively separable in the production and pollution abatement costs. Under an emission tax, the two firms share the tax burden according to the joint liability (see Tietenberg 1989) and the government is able to monitor only the total emission amount but not the individual emission amounts. Our major findings are as follows: (1) If the demand elasticity is large, it is optimal for the government to impose an emission tax rather than an output tax. Otherwise, it is optimal for the government to choose output tax. (2) Under an emission tax, each firm will take the belief on its opponent's type into account. The emission tax can induce the firms to undertake pollution abatement and choose the low-pollution production technology. (3) Under an output tax, each firm will not take the belief on its opponent's type into account. The output tax cannot induce the firms to undertake pollution abatement; and the firms will always choose the high-pollution production technology.