transaction such as output or income and a subsidy to a different market transaction that is a clean alternative to pollution. It … each tax and subsidy in a general equilibrium model with other tax distortions, and we compare these to the rates in a … first-best model. The tax-subsidy combination is explained in terms of a tax effect, an environmental effect, and a revenue …

Because of difficulties measuring pollution, many prior papers suggest a subsidy to some observable method of reducing … make an additional important point. In each case, we show that welfare under the suggested subsidy can be increased by the … addition of an output tax. While the suggested subsidy reduces damage per unit of output, it also decreases the firm's cost of …

combination of a presumptive tax and an environmental subsidy. A presumptive tax is a tax that is imposed under the presumption … that all production uses a dirty technology or all consumption goods become waste. The environmental subsidy is then … usefulness of the tax-subsidy combination, we review conceptual considerations regarding its implementation and practical …