On the flexibility of optimal policies for green design

Several recent papers show that different combinations of taxes and subsidi es can achieve the social optimum for green design and household waste mana gement when there are various market failures. This note shows that such po licy flexibility exists only if all relevant actions by individual agents c an be properly targeted by economic instruments. If the household can make a private effort to reduce waste, then an optimal policy is shown to be a u nique combination of given economic instruments.