Fully-Funded Clean Technology Support
H Schwerin  1@  
1 : Schwerin

This paper analyzes fully-funded schemes aimed at supporting clean production---ranging from a user tax, a producer tax, and a tradeable quota, to a standard of production. With
no income taxes, each of the equally welfare-ranked schemes fails to implement efficient joint dirty and clean production, because clean goods are overpriced relative to their marginal benefit when both clean and dirty goods are produced, however implements efficient pure clean production, because the subsidy can push dirty goods out of the market. Generally, with elastic or inelastic labor supply and labor income taxes, a two-part tariff helps to achieve efficiency.

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