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Download the Paper (613 K, PDF file) - January 1, 1976 Tell a colleague about it. Printing Tips: Select 'print as image' in the Acrobat print dialog if you have trouble printing.

ABSTRACT:
This paper presents a general equilibrium model with marketable pollution permits. It shows that competitive equilibrium with marketable permits is "conditionally optimal" in the sense that no Pareto improvement can be achieved without changing pollution standards. The paper also explores mechanisms for choosing efficient aggregate pollution levels.

SUGGESTED CITATION:
Ted C. Bergstrom, "Regulation of Externalities" (January 1, 1976). Department of Economics, UCSB. Ted Bergstrom. Paper 1976d.
http://repositories.cdlib.org/ucsbecon/bergstrom/1976d