Taxes, Permits and the Adoption of Abatement Technology under Imperfect Compliance

by Clara Villegas

- This paper analyzes the effects of the choice between price-based and quantity-based emission regulations on compliance incentives and social welfare in the presence of incomplete enforcement and technology adoption. We show that in contrast to taxes, the extent of violations under tradable emission permits (TEPs) decreases with the rate of technology adoption.

Villegas, C. (2009). "Taxes, Permits and the Adoption of Abatement Technology under Imperfect Compliance." Göteborgs Universitet School of Business, Economics and Law, Working Papers in Economics No 368, June 2009.