On reducing the windfall profits in environmental subsidy programs

C. Arguedas; D.P. van Soest

doi:10.1016/j.jeem.2009.04.002

On reducing the windfall profits in environmental subsidy programs

C. Arguedas, D.P. van Soest

Research output: Contribution to Journal › Article › Academic › peer-review

Abstract

Investment subsidies are widely used to induce adoption of new technologies that can lower the (marginal) cost of reducing emissions. To economize on these subsidies, governments would like to distinguish between firms that need to receive a subsidy to adopt a new technology, and firms that would adopt that technology even without subsidies. We show that policies consisting of a menu of emission taxes and investment subsidies can potentially induce firms to self-select. © 2009 Elsevier Inc. All rights reserved.

Original language	English
Pages (from-to)	192-205
Journal	Journal of Environmental Economics and Management
Volume	58
Issue number	2
DOIs	https://doi.org/10.1016/j.jeem.2009.04.002
Publication status	Published - 2009

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Arguedas, C., & van Soest, D. P. (2009). On reducing the windfall profits in environmental subsidy programs. Journal of Environmental Economics and Management, 58(2), 192-205. https://doi.org/10.1016/j.jeem.2009.04.002

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AB - Investment subsidies are widely used to induce adoption of new technologies that can lower the (marginal) cost of reducing emissions. To economize on these subsidies, governments would like to distinguish between firms that need to receive a subsidy to adopt a new technology, and firms that would adopt that technology even without subsidies. We show that policies consisting of a menu of emission taxes and investment subsidies can potentially induce firms to self-select. © 2009 Elsevier Inc. All rights reserved.

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