1992
DOI: 10.2307/1060386
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When Subsidies for Pollution Abatement Increase Total Emissions

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Cited by 22 publications
(7 citation statements)
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“…However, if the subsidy is available to entering producers, then in the long run, subsidies can produce very different outcome than taxes, and can even be counterproductive in terms of reducing emissions (see, e.g. Baumol and Oates, 1988;Pearce and Turner, 1990;Kohn, 1992). Because subsidies lower average costs, farms earn above-normal profits, which creates an incentive for additional farms to enter production.…”
Section: Gerber Key Portet and Steinfeldmentioning
confidence: 99%
“…However, if the subsidy is available to entering producers, then in the long run, subsidies can produce very different outcome than taxes, and can even be counterproductive in terms of reducing emissions (see, e.g. Baumol and Oates, 1988;Pearce and Turner, 1990;Kohn, 1992). Because subsidies lower average costs, farms earn above-normal profits, which creates an incentive for additional farms to enter production.…”
Section: Gerber Key Portet and Steinfeldmentioning
confidence: 99%
“…This policy is common in many countries and settings. Theoretical research has lamented the poor incentives of such subsidies (Kohn 1992;Aidt 1998;Fredriksson 1998) and empirical research is scarce. 3 Our analysis of heterogeneity in cost-effectiveness and benefit-cost ratios also provides a new domain to consider recent research on spatially differentiated policy (Muller and Mendelsohn 2009).…”
Section: Introductionmentioning
confidence: 99%
“…In the context of a 2-good, 2-factor general equilibrium model in which only one of the production processes generates pollution, Mestelman (1981Mestelman ( , 1982 constructs examples in which fiscal incentives for pollution abatement can have perverse implications because of the patterns of substitution which they induce. Kohn (1992) extends these analyses and presents further numerical examples whilst Plott (1%6), in a similar framework, shows the welfare-reducing implications of taxing the 'wrong' input when a good is jointly produced by way of a polluting and non-polluting factor of production.…”
Section: Introductionmentioning
confidence: 79%