| Article ID: | iaor1996101 |
| Country: | United States |
| Volume: | 4 |
| Issue: | 1 |
| Start Page Number: | 46 |
| End Page Number: | 56 |
| Publication Date: | Dec 1995 |
| Journal: | Production and Operations Management |
| Authors: | Hartl Richard F. |
| Keywords: | geography & environment, programming: mathematical |
This is an investigation into how optimal production rates and optimal price levels react to the introduction of an environmental tax on emissions. While, in the case of perfect competition, a linear tax has no effect, the author shows that in the monopolistic case the optimal production and emissions rates decrease in all instances-without an additional smoothing effect. The desirable effect, emissions peaks being cut off, is only achieved when a progressive tax is imposed.