We study the cost-effectiveness of a transferable emissions permit system (TEPS) vis a vis a system of emissions standards. Our analysis includes along with abatement costs, the costs of enforcing the system to induce compliance. Further, the analysis considers complete and incomplete...

In contrast with what we perceive is the conventional wisdom about setting emissions taxes under uncertainty, we demonstrate that setting a uniform tax equal to expected marginal damage is not generally efficient under incomplete information about firms' abatement costs and damages from...