IDEAS home Printed from https://ideas.repec.org/a/sae/pubfin/v8y1980i3p345-349.html
   My bibliography  Save this article

Corrective Taxes and Auctions of Rights in the Control of Externalities

Author

Listed:
  • Randall G. Holcombe

    (Auburn University)

  • Roger E. Meiners

    (Texas A&M University)

Abstract

Auctions of pollution rights have sometimes been suggested as an alternative to corrective taxes. These two methods of pollution control are not, in general, equivalent, however. When pollution rights are auctioned, the right to pollute is equivalent to the right to produce, so the auction of rights raises the possibility that the competitiveness of the market could be reduced. Individual producers have an incentive to purchase large amounts of pollution rights in order to gain some degree of monopoly power over the market. This possibility does not exist when corrective taxes are used instead.

Suggested Citation

  • Randall G. Holcombe & Roger E. Meiners, 1980. "Corrective Taxes and Auctions of Rights in the Control of Externalities," Public Finance Review, , vol. 8(3), pages 345-349, July.
    • Handle: RePEc:sae:pubfin:v:8:y:1980:i:3:p:345-349
    DOI: 10.1177/109114218000800306
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/109114218000800306
    Download Restriction: no
    File URL: https://libkey.io/10.1177/109114218000800306?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    2. Baumol, William J, 1972. "On Taxation and the Control of Externalities," American Economic Review, American Economic Association, vol. 62(3), pages 307-322, June.
    3. Buchanan, James M, 1969. "External Diseconomies, Corrective Taxes, and Market Structure," American Economic Review, American Economic Association, vol. 59(1), pages 174-177, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jon D. Harford, 1984. "Relatively Efficient Pollution Standards Under Perfect Competition," Public Finance Review, , vol. 12(2), pages 183-195, April.
    2. Wallace E. Oates, 1981. "Corrective Taxes and Auctions of Rights in the Control of Externalities: Some Further Thoughts," Public Finance Review, , vol. 9(4), pages 471-478, October.
    3. Svendsen, Gert Tinggaard & Christensen, Jan Lien, 1999. "The US SO2 auction: analysis and generalization," Energy Economics, Elsevier, vol. 21(5), pages 403-416, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dieter Schmidtchen & Jenny Helstroffer & Christian Koboldt, 2021. "Regulatory failure and the polluter pays principle: why regulatory impact assessment dominates the polluter pays principle," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 23(1), pages 109-144, January.
    2. Cropper, Maureen L & Oates, Wallace E, 1992. "Environmental Economics: A Survey," Journal of Economic Literature, American Economic Association, vol. 30(2), pages 675-740, June.
    3. Ko, Il-Dong, 1988. "Issues in the control of stock externality problems with inflexible policy measures," ISU General Staff Papers 198801010800009859, Iowa State University, Department of Economics.
    4. Dieter Schmidtchen & Jenny Helstroffer & Christian Koboldt, 2015. "Replacing the Polluter Pays Principle by the Cheapest Cost Avoider Principle: On the Efficient Treatment of External Costs," Working Papers of BETA 2015-08, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    5. Frans P. Vries & Nick Hanley, 2016. "Incentive-Based Policy Design for Pollution Control and Biodiversity Conservation: A Review," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(4), pages 687-702, April.
    6. Jonathan Colmer & Ralf Martin & Mirabelle Muûls & Ulrich J. Wagner, 2020. "Does pricing carbon mitigate climate change? Firm-level evidence from the European Union emissions trading scheme," CEP Discussion Papers dp1728, Centre for Economic Performance, LSE.
    7. Meredith Fowlie & Mar Reguant & Stephen P. Ryan, 2016. "Market-Based Emissions Regulation and Industry Dynamics," Journal of Political Economy, University of Chicago Press, vol. 124(1), pages 249-302.
    8. Peifang Yang & Daniel T. Kaffine, 2016. "Community-Based Tradable Permits for Localized Pollution," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(4), pages 773-788, December.
    9. Vorotnikova, Ekaterina & Schmitz, Andrew, 2013. "On Positive Externality," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150462, Agricultural and Applied Economics Association.
    10. Roger Congleton, 2014. "The contractarian constitutional political economy of James Buchanan," Constitutional Political Economy, Springer, vol. 25(1), pages 39-67, March.
    11. Acey, Charisma & Kisiangani, Joyce & Ronoh, Patrick & Delaire, Caroline & Makena, Evelyn & Norman, Guy & Levine, David & Khush, Ranjiv & Peletz, Rachel, 2019. "Cross-subsidies for improved sanitation in low income settlements: Assessing the willingness to pay of water utility customers in Kenyan cities," World Development, Elsevier, vol. 115(C), pages 160-177.
    12. Requate, Till, 2005. "Environmental Policy under Imperfect Competition: A Survey," Economics Working Papers 2005-12, Christian-Albrechts-University of Kiel, Department of Economics.
    13. Green, Jerry & Sheshinski, Eytan, 1976. "Direct versus Indirect Remedies for Externalities," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 797-808, August.
    14. Tatyana Deryugina & Frances C. Moore & Richard S.J. Tol, 2020. "Applications of the Coase Theorem," Working Paper Series 0820, Department of Economics, University of Sussex Business School.
    15. Dijkstra, Bouwe R. & de Vries, Frans P., 2006. "Location choice by households and polluting firms: An evolutionary approach," European Economic Review, Elsevier, vol. 50(2), pages 425-446, February.
    16. Damien Sans, 2015. "Optimal Taxation Rule Reversal in the Presence of Gentle Polluters and Greedy Cleaners," Working Papers halshs-01247190, HAL.
    17. Klaus Eisenack, 2014. "The Inefficiency of Private Adaptation to Pollution in the Presence of Endogenous Market Structure," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 57(1), pages 81-99, January.
    18. Richard S. J. Tol, 2021. "Selfish Bureaucrats And Policy Heterogeneity In Nordhaus’ Dice," World Scientific Book Chapters, in: Robert Mendelsohn (ed.), CLIMATE CHANGE ECONOMICS Commemoration of Nobel Prize for William Nordhaus, chapter 6, pages 77-92, World Scientific Publishing Co. Pte. Ltd..
    19. Murty, Sushama, 2010. "Externalities and fundamental nonconvexities: A reconciliation of approaches to general equilibrium externality modeling and implications for decentralization," Journal of Economic Theory, Elsevier, vol. 145(1), pages 331-353, January.
    20. Gaël Giraud & Cécile Renouard, 2011. "In search of an alternative to shareholder value maximization," Post-Print hal-00609153, HAL.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:pubfin:v:8:y:1980:i:3:p:345-349. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.