The Symmetry Between Controlling Pollution By Price and Controlling It By Quantity

Under ideally competitive conditions, both controlling pollution by price (using a combined charge-subsidy scheme) and controlling it by quantity (using a marketable permit scheme) can achieve short- and long-run efficiency and also political acceptability, provided that both schemes embody the same degree of environmental ownership. The resulting full symmetry between control by price and control by quantity, a symmetry overlooked in the literature because of the entry-exit assumptions automatically made for most subsidy schemes, allows a useful practical choice to be made between the two control systems.