In general, the ways in which firms, as sources of emissions, reduce emissions of pollutants include reducing output, installing pollution control equipment, improving production processes, and developing new technologies. In response to environmental regulations, firms combine such pollution abatement methods while seeking profits. Therefore, total abatement cost (TAC) must be the sum of the direct cost of pollution abatement and its opportunity cost represented by output reduction.
This study uses a marginal abatement cost curve that connects both output reduction and pollutant reduction formulated by Nagai (2013), and analyzes how an environmental tax, a marketable permit system, and direct regulation under monopoly affect a firm’s optimal emissions and the social welfare.
独占下における環境政策
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085-097劉
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