demand, the cost of abatement and the damage caused from pollution. Under these modes of uncertainty we derive sufficient …

We welfare rank different types of second-best environmental policy. The focus is on the roles of uncertainty and … uncertainty is economic, the best recipe is to levy taxes (on pollution or output) and use the collected tax revenues to finance … public abatement. However, when environmental uncertainty is the dominant source of extrinsic uncertainty, Kyoto-like rules …

We study the importance of uncertainty and public finance to the welfare ranking of three environmental policy … revenues finance public abatement. When the main source of uncertainty is economic, the most efficient recipe is to levy … pollution taxes and use the collected tax revenues to finance public abatement. However, when environmental uncertainty is the …