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α: calibrated so average coauthorship-adjusted count equals average raw count
This study examines the optimal combination of emission and fuel taxes for reducing greenhouse gas emissions in a monopoly market. Greenhouse gases are emitted during both production and consumption stages (life-cycle emissions). We present a case in which a government should impose an additional strictly positive fuel tax, even when an optimal emission tax is introduced: the case of a producer selecting fuel efficiency endogenously. Remarkably, the unit cost of fuel should be larger than the marginal social cost of fuel. The results imply that a government may maintain fuel taxes even after introducing an effective emission tax and be able to construct a socially desirable tax structure by using existing taxes.