The government, as a principal, may seek to induce a private investor, as an agent, to build and operate an unconventional-oil production plant to promote early production experience with such plants. Facing significant uncertainty about the future, it also wants to limit the cost to the public of doing this. This report offers an analytic way to design and assess packages of policy instruments that the government can use to achieve its goal.So, if one item costs $10 and another costs $5, the ratio of the two is 2athe first costs twice as much as the second, per item. one point than increasing the price floor to do the same thing at prices somewhere above $40 per barrel. ... cost to the government of doing so; that is, the slope of the blue arrows is only slightly lower than that for the red arrows, despite a large expansion in the size of the tax credit.
|Title||:||Federal Financial Incentives to Induce Early Experience Producing Unconventional Liquid Fuels|
|Author||:||Frank A. Camm, James T. Bartis, Claudia L. Bushman|
|Publisher||:||Rand Corporation - 2008|