Excess Burden of Taxation and Environmental Policy Mix with a Consumer‐Friendly Firm

Abstract

This study examines the environmental policy mix of tradable emission permits and emission taxes in a duopoly model with a consumer‐friendly firm. We analyse the interplay of the two policies and the welfare consequences in the presence of excess burden of taxation. We show that an emission tax can be redundant when both the excess burden of taxation and the degree of consumer friendliness are insignificant. However, when the excess burden of taxation is significant, tradable permits policy with tax treatment should be applied to enhance welfare in the presence of a consumer‐friendly firm. Finally, under the tax revenue‐neutral case where the excess burden of taxation does not matter, the environmental policy mix is also efficient if the degree of consumer friendliness is sufficiently high.

Cooperation with a multiproduct corporation in a strategic managerial delegation

“…For studies on environmental responsibility, see Liu et al (2015), Lee Kumar (1992) and Eckel and Neary (2010) point out that one characteristic of current economies is the presence of multiproduct firms. 5 See, for example, Goering (2007), Goering (2012), Lambertini and Tampieri (2015), Leal et al (2018), and Garcia et al (2019). 6 Proof is provided in Appendix A.…”

“…7 Appendix B provides the CSR ranking under different regimes. 8 For more discussion on this fact, see Lambertini and Tampieri (2015), Leal et al (2018), and Garcia et al (2019). 9 Appendix C provides the profits ranking under different regimes.…”

“…For more discussion on this fact, see Lambertini and Tampieri (), Leal et al. (), and Garcia et al. ().…”

“…See, for example,Lambertini and Tampieri (2015),Leal et al (2018),Leal et al (2019a,b),Garcia et al (2019),, andChen et al (2019).…”

“…See, for example, Goering (), Goering (), Lambertini and Tampieri (), Leal et al. (), and Garcia et al. ().…”