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missions, policy makers can more closely approximate the ambient impact of emissions by incorporating adjustment factors for seasonal or daily fluctuations or individual transfer coefficients in the tax.

Economic efficiency can be defined as the maximization of social welfare. An efficient market is one that allows society to maximize the net present value of benefits: the difference between a stream of social benefits and social costs over time (Comisari 2011). The efficient level of production is referred to as Pareto optimal because there is no way to rearrange production or reallocate goods in such a way that someone is better off without making someone else worse off in the process (Burritt 2011).

Taxes and charges facilitate environmental improvements similar to those that result from marketable permit systems. Rather than specifying the total quantity of emissions, however, taxes, fees, and charges specify the effective price of emitting pollutants (Burritt 2000).

Environment legislature also leads to environmental subsidies. Subsidies paid by the government to firms or consumers for per unit reductions in pollution create the same abatement incentives as emission taxes or charges. If the government subsidizes the use of a cleaner fuel or the purchase of a particular control technology, firms will switch from the dirtier fuel or install the control technology to reduce emissions up to the point where the private costs of control are equal to the subsidy. It is important to keep in mind that an environmental subsidy is designed to correct for an externality not already taken into account by firms when making production decisions.

Environment legislature also leads to environmental subsidies. Subsidies paid by the government to firms or consumers for per unit reductions in pollution create the same abatement incentives as emission taxes or charges. If the government subsidizes the use of a cleaner fuel or the purchase of a particular control technology, firms will switch from the dirtier fuel or install the control technology to reduce emissions up to the point where the private costs of control are equal to the subsidy. It is important to keep in mind that an environmental subsidy is designed to correct for an externality not already taken into account by firms when making production decisions

It is possible to minimize the entry and exit of firms resulting from subsidies by redefining the subsidy as a partial repayment of verified abatement costs, instead of defining it as a per unit payment for emissions reductions relative to a baseline. Under this definition, the subsidy now only relates to abatement costs incurred and does not shift the total or average cost curves, thereby leaving the entry and exit decisions of firms unaffected (Burritt 2011).

Environmental legislature leads to tax- subsidy combination. Emission taxes and environmental subsidies can also be combined to achieve the same level of abatement as achieved when the tax and subsidy instruments are used separately. One example of this type of instrument is referred to as a deposit refund system in which the deposit operates as a tax and the refund serves as a partially offsetting subsidy. As with the other market instruments already discussed, a deposit-refund system creates economic incentives to return a product for reuse or proper disposal, or to use a particular input in production, pr本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。