J. Hackmann, SUPERIORITY OF FISCAL SOLUTION IN ENVIRON MENTAL-POLICY FROM AN INFORMATION STANDPOINT - A PIGOUVIAN TAX, Jahrbuch fur Sozialwissenschaft, 45(3), 1994, pp. 329-367
According to the literature no superior instrument for environmental p
olicy exists. Ex ante fixing of pollution standards is the main cause
for this view. Such a fixing, however, is not the appropriate assumpti
on for evaluating environmental policy. An effluent tax with ex post f
ixing of tax rates is superior. The regulatory authority needs less in
formation for implementing it. Knowledge of marginal damage suffices w
hereas for fixing standards regulators ought to have additional inform
ation. The same is true for command and control regulations. Advantage
s stemming from the informational superiority are described and furthe
r comparisons with other instruments are made.