Ambient Taxes When Polluters Have Multiple Choices,

Ambient-based tax–subsidy schemes have drawn considerable interest in nonpoint pollution literature as alternatives to emissions-based instruments. Expanding especially on Segersonʹs [J. Environ. Econom. Management15, 88–98 (1988)] seminal article, this article examines the optimal design and budget-balancing properties of ambient tax–subsidy schemes under more realistic assumptions about the dimensions of firmsʹ choice sets than prior research.