We incorporate emission into a general equilibrium model with rich dispersion in productivity among monopolistically competitive plants. Emission is modeled as a by-product from goods production. An abatement technology is available to the plants for reducing emission. We compare an emission tax...

This paper studies and compares the welfare effects of emission taxes and emission standards in a general equilibrium model with two sectors in which plants can freely enter and exit. In one of the sectors plants differ in their productivity, produce differentiated goods, and generate emissions...

When a society wants to control aggregate emission under a certain target, is it more desirable to impose a tax or a nontradable regulatory standard on emission? We answer this question by focusing on the role of productivity heterogeneity across a continuum of plants. The plants are...