Effluent taxation in monopoly markets

Journal Article · Sun Jun 01 04:00:00 EDT 1980 · J. Environ. Econ. Manage.; (United States)

DOI:https://doi.org/10.1016/0095-0696(80)90012-1· OSTI ID:5191179

Misiolek, W S

Asch and Seneca (A + S) demonstrate in a recent issue of this journal that complete internalization of external cost by a monopoly firm will sometimes result in a social-welfare gain and sometimes will not. The critical factor in determining whether a gain or a loss will occur is the size of external cost relative to the monopolist's price-cost margin. If full internalization of the externality is undesirable, A + S note that partial internalization may be preferable to none, but do not develop a method of determining the degree of internalization that is most appropriate. In this note, the A + S analysis is extended to derive an emissions-tax formula which establishes the extent of internalization required to achieve an efficient allocation of resources in markets characterized by (some degree) monopoly power. 3 figures, 6 references.

• Research Organization: Univ. of Alabama, Auburn
• OSTI ID: 5191179
• Journal Information: J. Environ. Econ. Manage.; (United States), Journal Name: J. Environ. Econ. Manage.; (United States) Vol. 7:2; ISSN JEEMD
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290300* -- Energy Planning & Policy-- Environment
Health
& Safety
COST
ECONOMIC ANALYSIS
ECONOMICS
INDUSTRY
MONOPOLIES
POLLUTION ABATEMENT
TAXES