We compare the performance of emission taxes and quotas when there are opportunities for communication between the government and a polluting industry. We consider a competitive industry that communicates its private information about production costs strategically to the government before the...

We analyze equilibrium emission taxes under international Cournot duopoly in the presence of asymmetric information between firms. When each firm does not know the production cost of its rival located in the other country, the government of each country can use its emission tax as a signal of...

A growing literature suggests that carbon emissions are most efficiently reduced by carbon pricing. The evidence base on the effectiveness of market-based mechanisms, however, faces three key limitations: studies often (a) predict, rather than evaluate effects, (b) show large difference in...