Abstract This paper analyzes two pollution control instruments, uniform taxes and absolute standards, when polluting firms engage in partial ownership arrangements (POAs). Specifically, we examine the case of a bilateral POA between competing firms in which both hold equity shares on each other's profits as silent investments. We show that taxes and standards are equally efficacious in affecting the firms' output decisions and pollution emissions. Compared to the social planner's solution, a bilateral POA results in suboptimal outcomes with lower industrial output and consumer surplus. Firm profits are higher and environmental quality improves (since emissions decline), but social welfare decreases. We compare the equilibrium results associated with two different types of POAs (bilateral vs. unilateral), and examine their differences in welfare implications for the choice of policy options between taxes and standards.

中文翻译：

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部分所有权安排下的排放税与环境标准

摘要 本文分析了污染企业参与部分所有权安排（POA）时的两种污染控制手段，统一税收和绝对标准。具体来说，我们研究了竞争公司之间的双边 POA 的情况，其中双方都持有彼此利润的股权作为无声投资。我们表明，税收和标准在影响企业的产出决策和污染排放方面同样有效。与社会计划者的解决方案相比，双边 POA 导致工业产出和消费者剩余较低的次优结果。企业利润更高，环境质量改善（因为排放量下降），但社会福利下降。我们比较了与两种不同类型的 POA（双边与单边）相关的均衡结果，