Well-intended policies aimed at reducing greenhouse gas emissions may have unintended undesirable consequences. Recently, a large amount of literature has emerged showing under what conditions this so-called ‘Green Paradox’ may occur. We review this literature and identify the key mechanisms behind these paradoxical policy outcomes and highlight avenues for future research.
{"title":"Unintended Detrimental Effects of Environmental Policy: The Green Paradox and Beyond","authors":"E. van der Werf, Corrado Di Maria","doi":"10.2139/ssrn.1855899","DOIUrl":"https://doi.org/10.2139/ssrn.1855899","url":null,"abstract":"Well-intended policies aimed at reducing greenhouse gas emissions may have unintended undesirable consequences. Recently, a large amount of literature has emerged showing under what conditions this so-called ‘Green Paradox’ may occur. We review this literature and identify the key mechanisms behind these paradoxical policy outcomes and highlight avenues for future research.","PeriodicalId":176966,"journal":{"name":"ERN: Externalities; Redistributive Effects; Environmental Taxes & Subsidies (Topic)","volume":"8 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128538037","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper examines alternative ways that the value of CO2 emissions allowances created under cap-and-trade policy could be returned to households. One approach (based on principles of economic efficiency) is effectively a “tax shift” that would use revenues from an auction of CO2 emissions allowances to reduce preexisting distortionary taxes. A second approach (based on principles of property rights for common-pool resources), known as cap-and-dividend, would refund allowance value as equal lump-sum cash transfers to households. Economic theory suggests (with some caveats) that a tax shift would be considerably less costly to the overall economy. In contrast, cap-and-dividend provides ample compensation for low-income households, though it appears to be more costly than other approaches, including perhaps well-designed regulatory policies. A dividend approach might be combined with other policies to provide incentives for households to invest in energy-efficient technologies and thereby lower the costs of the carbon policy.
{"title":"Options for Returning the Value of CO2 Emissions Allowances to Households","authors":"D. Burtraw, I. Parry","doi":"10.2139/ssrn.1767411","DOIUrl":"https://doi.org/10.2139/ssrn.1767411","url":null,"abstract":"This paper examines alternative ways that the value of CO2 emissions allowances created under cap-and-trade policy could be returned to households. One approach (based on principles of economic efficiency) is effectively a “tax shift” that would use revenues from an auction of CO2 emissions allowances to reduce preexisting distortionary taxes. A second approach (based on principles of property rights for common-pool resources), known as cap-and-dividend, would refund allowance value as equal lump-sum cash transfers to households. Economic theory suggests (with some caveats) that a tax shift would be considerably less costly to the overall economy. In contrast, cap-and-dividend provides ample compensation for low-income households, though it appears to be more costly than other approaches, including perhaps well-designed regulatory policies. A dividend approach might be combined with other policies to provide incentives for households to invest in energy-efficient technologies and thereby lower the costs of the carbon policy.","PeriodicalId":176966,"journal":{"name":"ERN: Externalities; Redistributive Effects; Environmental Taxes & Subsidies (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-02-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130993150","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Export VAT refund rebate and export tax (EVRRET) measures have been adopted on energy intensive products in recent years in China. They are proclaimed to be climate policy, yet there is no explicit and unique carbon cost set on export - the implicit export carbon tax rates vary dramatically across sectors and over different periods. This paper provides a method of introducing an explicit and unique carbon cost into the current EVRRET. By setting a comparable carbon cost (2'9/tCO2 and 3'9/tCO2) for eight major energy-intensive sectors to which the EVRRET are massively applied, it derives the corresponding ad valorem average rate for each sector. This paper finds that the introduction of a carbon cost into export VAT refund rebate policy would not increase the current export VAT refund rebate rate (except for the chemical sector), but would simply define a ceiling, while the same introduction into the export tax policy would lead to an overall increase in sectoral export tax rates. This paper concludes by examining competitiveness and WTO concerns, suggesting that the better option for introducing a carbon cost into Chinese exports would be through reforming export VAT refund rebate policy.
{"title":"Can Export Tax be Genuine Climate Policy? An Analysis on China’s Export Tax and Export VAT Refund Rebate Policies","authors":"Xin Wang, Jifeng Li, Yaxiong Zhang","doi":"10.2139/ssrn.1737945","DOIUrl":"https://doi.org/10.2139/ssrn.1737945","url":null,"abstract":"Export VAT refund rebate and export tax (EVRRET) measures have been adopted on energy intensive products in recent years in China. They are proclaimed to be climate policy, yet there is no explicit and unique carbon cost set on export - the implicit export carbon tax rates vary dramatically across sectors and over different periods. This paper provides a method of introducing an explicit and unique carbon cost into the current EVRRET. By setting a comparable carbon cost (2'9/tCO2 and 3'9/tCO2) for eight major energy-intensive sectors to which the EVRRET are massively applied, it derives the corresponding ad valorem average rate for each sector. This paper finds that the introduction of a carbon cost into export VAT refund rebate policy would not increase the current export VAT refund rebate rate (except for the chemical sector), but would simply define a ceiling, while the same introduction into the export tax policy would lead to an overall increase in sectoral export tax rates. This paper concludes by examining competitiveness and WTO concerns, suggesting that the better option for introducing a carbon cost into Chinese exports would be through reforming export VAT refund rebate policy.","PeriodicalId":176966,"journal":{"name":"ERN: Externalities; Redistributive Effects; Environmental Taxes & Subsidies (Topic)","volume":"26 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-01-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122981249","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Biofuels have gained increasing attention as an alternative to fossil fuels for several reasons, one of which is their potential to reduce the greenhouse gas (GHG) emissions from the transportation sector. Recent studies have questioned the validity of claims about the potential for biofuels to reduce GHG emissions relative to the liquid fossil fuels they are replacing when emissions due to direct and indirect land use changes (ILUCs) that accompany biofuels are included in the life-cycle GHG intensity of biofuels. Studies estimate that the GHG emissions released from ILUC could more than offset the direct GHG savings by producing biofuels and replacing liquid fossil fuels and create a “carbon debt” with a long payback period. The estimates of this payback period, however, vary widely across biofuels from different feedstocks and even for a single biofuel across different modeling assumptions. In the case of corn ethanol, this payback period is found to range from 15 to 200 years. We discuss the challenges in estimating the ILUC effect of a biofuel and differences across biofuels, and its sensitivity to the assumptions and policy scenarios considered by different economic models. We also discuss the implications of ILUC for designing policies that promote biofuels and seek to reduce GHG emissions. In a first best setting, a global carbon tax is needed to set both direct and indirect land use change emissions to their optimal levels. However, it is unclear whether unilateral GHG mitigation policies, even if they penalize the ILUC related emissions, would increase social welfare and lead to optimal emission levels. In the absence of a global carbon tax, incentivizing sustainable land use practices through certification standards, government regulations and market-based pressures may be a viable option for reducing ILUC.
{"title":"Can Biofuels be a Solution to Climate Change? The Implications of Land Use Change Related Emissions for Policy","authors":"M. Khanna, Christine Crago, Mairi J. Black","doi":"10.2139/ssrn.1734798","DOIUrl":"https://doi.org/10.2139/ssrn.1734798","url":null,"abstract":"Biofuels have gained increasing attention as an alternative to fossil fuels for several reasons, one of which is their potential to reduce the greenhouse gas (GHG) emissions from the transportation sector. Recent studies have questioned the validity of claims about the potential for biofuels to reduce GHG emissions relative to the liquid fossil fuels they are replacing when emissions due to direct and indirect land use changes (ILUCs) that accompany biofuels are included in the life-cycle GHG intensity of biofuels. Studies estimate that the GHG emissions released from ILUC could more than offset the direct GHG savings by producing biofuels and replacing liquid fossil fuels and create a “carbon debt” with a long payback period. The estimates of this payback period, however, vary widely across biofuels from different feedstocks and even for a single biofuel across different modeling assumptions. In the case of corn ethanol, this payback period is found to range from 15 to 200 years. We discuss the challenges in estimating the ILUC effect of a biofuel and differences across biofuels, and its sensitivity to the assumptions and policy scenarios considered by different economic models. We also discuss the implications of ILUC for designing policies that promote biofuels and seek to reduce GHG emissions. In a first best setting, a global carbon tax is needed to set both direct and indirect land use change emissions to their optimal levels. However, it is unclear whether unilateral GHG mitigation policies, even if they penalize the ILUC related emissions, would increase social welfare and lead to optimal emission levels. In the absence of a global carbon tax, incentivizing sustainable land use practices through certification standards, government regulations and market-based pressures may be a viable option for reducing ILUC.","PeriodicalId":176966,"journal":{"name":"ERN: Externalities; Redistributive Effects; Environmental Taxes & Subsidies (Topic)","volume":"46 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-01-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126342344","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Systemic risk depends upon aggregate exposure for the entire financial sector, as well as the pattern of exposures between firms. There is a parallel with global warming, where the rise in the Earth’s temperature depends upon the aggregate volume of CO2 and other greenhouse gases in the atmosphere. This suggests that ‘cap and trade,’ issuing licenses that limit aggregate financial sector ratios but allowing firms to trade licenses with each other so that their individual contributions can vary, is a useful approach to containing systemic financial risk. In particular it avoids potentially costly direct control of individual firm liabilities. Cap and trade does not appear difficult to implement for controlling aggregate maturity mismatch, and unlike many other regulations can be introduced on a jurisdiction by jurisdiction basis, without being undermined by cross-border arbitrage or by the movement of risk into the unregulated sector. The main requirement is a comprehensive liability register, which will in any case be very useful to regulators both for risk monitoring and for resolution of failed institutions. Industry will object that this requires a major change in their business models, but this could reduce financial market volatility and hence provide further benefits to investors.
系统性风险取决于整个金融部门的总风险敞口，以及公司之间的风险敞口模式。这与全球变暖有相似之处，地球温度的上升取决于大气中二氧化碳和其他温室气体的总量。这表明，“总量管制与交易”(cap and trade)是遏制系统性金融风险的一种有用方法，即发放限制金融部门总体比率的许可证，但允许公司之间进行许可证交易，这样它们的个人贡献就可以有所不同。特别是，它避免了对个别公司负债的潜在的代价高昂的直接控制。在控制总期限错配方面，“总量管制与交易”似乎并不难实施，而且与许多其他监管不同，它可以在各个司法管辖区的基础上引入，而不会因跨境套利或风险转移到不受监管的部门而受到损害。主要要求是一份全面的责任登记册，无论如何，这对监管机构在风险监控和破产机构处置方面都非常有用。业界会反对说，这需要他们对商业模式进行重大改变，但这可以减少金融市场的波动，从而为投资者带来进一步的好处。
{"title":"Using ‘Cap and Trade’ to Contain Systemic Financial Risk","authors":"A. Milne","doi":"10.2139/ssrn.1723721","DOIUrl":"https://doi.org/10.2139/ssrn.1723721","url":null,"abstract":"Systemic risk depends upon aggregate exposure for the entire financial sector, as well as the pattern of exposures between firms. There is a parallel with global warming, where the rise in the Earth’s temperature depends upon the aggregate volume of CO2 and other greenhouse gases in the atmosphere. This suggests that ‘cap and trade,’ issuing licenses that limit aggregate financial sector ratios but allowing firms to trade licenses with each other so that their individual contributions can vary, is a useful approach to containing systemic financial risk. In particular it avoids potentially costly direct control of individual firm liabilities. Cap and trade does not appear difficult to implement for controlling aggregate maturity mismatch, and unlike many other regulations can be introduced on a jurisdiction by jurisdiction basis, without being undermined by cross-border arbitrage or by the movement of risk into the unregulated sector. The main requirement is a comprehensive liability register, which will in any case be very useful to regulators both for risk monitoring and for resolution of failed institutions. Industry will object that this requires a major change in their business models, but this could reduce financial market volatility and hence provide further benefits to investors.","PeriodicalId":176966,"journal":{"name":"ERN: Externalities; Redistributive Effects; Environmental Taxes & Subsidies (Topic)","volume":"36 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-12-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123918770","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
I study climate policy choices for a “policy bloc” of fuel-importers, when a “fringe” of other fuel importers have no climate policy, fuel exporters consume no fossil fuels, and importers produce no such fuels. The policy bloc and exporter blocs act strategically in fossil fuel markets. When the policy bloc sets a carbon tax, the fuel import price set by the exporter is reduced, and more so when the policy bloc is larger. The carbon tax then serves to extract the exporter’s rent. The fringe also gains from reduced fuel import prices, and gains more when the policy bloc is larger. When the policy bloc sets an emissions cap, fuel demand becomes less price elastic. In response, a monopolistic exporter sets the fuel export price higher than under a tax, which hurts both the policy bloc and the fringe. This effect can be stronger when the policy bloc is larger, so that the fringe loses when the policy bloc is larger, opposite to the tax policy case. Overall, a cap is inferior to a tax for fossil fuel importers, both those that implement a climate policy, and those that do not.
{"title":"Taxes Versus Cap-and-Trade in Climate Policy When Only Some Fuel Importers Abate","authors":"J. Strand","doi":"10.2139/ssrn.1705111","DOIUrl":"https://doi.org/10.2139/ssrn.1705111","url":null,"abstract":"I study climate policy choices for a “policy bloc” of fuel-importers, when a “fringe” of other fuel importers have no climate policy, fuel exporters consume no fossil fuels, and importers produce no such fuels. The policy bloc and exporter blocs act strategically in fossil fuel markets. When the policy bloc sets a carbon tax, the fuel import price set by the exporter is reduced, and more so when the policy bloc is larger. The carbon tax then serves to extract the exporter’s rent. The fringe also gains from reduced fuel import prices, and gains more when the policy bloc is larger. When the policy bloc sets an emissions cap, fuel demand becomes less price elastic. In response, a monopolistic exporter sets the fuel export price higher than under a tax, which hurts both the policy bloc and the fringe. This effect can be stronger when the policy bloc is larger, so that the fringe loses when the policy bloc is larger, opposite to the tax policy case. Overall, a cap is inferior to a tax for fossil fuel importers, both those that implement a climate policy, and those that do not.","PeriodicalId":176966,"journal":{"name":"ERN: Externalities; Redistributive Effects; Environmental Taxes & Subsidies (Topic)","volume":"31 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-11-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132922414","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
There is a widespread consensus among the most important players in developed countries (voters, politicians, producers, traditional and green interest groups and bureaucracies) that a shift towards an eco-social market economy is essential for sustainable growth. Nevertheless, market-based instruments have not been implemented satisfactorily in environmental policy yet. To identify the reasons for this insufficient implementation in the past decade the Public Choice theory is used. The players’ behavior is analyzed in order to show that their incentives for implementing market-based instruments in environmental policy instead of command-and-control measures are surprisingly weak. Knowing the obstacles to implementing market-based instruments provides valuable insights into how to overcome them.
{"title":"Why Does Environmental Policy in Representative Democracies Tend to Be Inadequate? A Preliminary Public Choice Analysis","authors":"Andrea Kollmann, F. Schneider","doi":"10.3390/SU2123710","DOIUrl":"https://doi.org/10.3390/SU2123710","url":null,"abstract":"There is a widespread consensus among the most important players in developed countries (voters, politicians, producers, traditional and green interest groups and bureaucracies) that a shift towards an eco-social market economy is essential for sustainable growth. Nevertheless, market-based instruments have not been implemented satisfactorily in environmental policy yet. To identify the reasons for this insufficient implementation in the past decade the Public Choice theory is used. The players’ behavior is analyzed in order to show that their incentives for implementing market-based instruments in environmental policy instead of command-and-control measures are surprisingly weak. Knowing the obstacles to implementing market-based instruments provides valuable insights into how to overcome them.","PeriodicalId":176966,"journal":{"name":"ERN: Externalities; Redistributive Effects; Environmental Taxes & Subsidies (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-10-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126623786","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper points to the important role which the elasticity of aggregate capital supply with respect to the net rate of return to capital plays for the efficiency of policymaking in a decentralized economy with mobile capital and spillovers among jurisdictions. In accordance with previous studies, we show that under the assumption of a fixed capital supply (zero capital supply elasticity) the decentralized policy choice is optimal. If the capital supply elasticity is strictly positive, however, capital tax rates are inefficiently low in the decentralized equilibrium.
{"title":"Interjurisdictional Spillovers, Decentralized Policymaking and the Elasticity of Capital Supply","authors":"T. Eichner, M. Runkel","doi":"10.1257/AER.102.5.2349","DOIUrl":"https://doi.org/10.1257/AER.102.5.2349","url":null,"abstract":"This paper points to the important role which the elasticity of aggregate capital supply with respect to the net rate of return to capital plays for the efficiency of policymaking in a decentralized economy with mobile capital and spillovers among jurisdictions. In accordance with previous studies, we show that under the assumption of a fixed capital supply (zero capital supply elasticity) the decentralized policy choice is optimal. If the capital supply elasticity is strictly positive, however, capital tax rates are inefficiently low in the decentralized equilibrium.","PeriodicalId":176966,"journal":{"name":"ERN: Externalities; Redistributive Effects; Environmental Taxes & Subsidies (Topic)","volume":"61 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-10-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126187282","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
D. Koplow, A. Jung, Lucky Lonton, Cynthia Lin, C. Charles
This paper is published as part of the series Untold Billions: Fossil-fuel subsidies, their impacts and the path to reform. Prepared by the Global Subsidies Initiative (GSI) in conjunction with Earth Track, this study helps increase the body of knowledge about the data sources that hold information on subsidies to fossil-fuel producers, by reviewing available data in a series of countries, diverse in terms of their level of data transparency, governance systems, energy markets and stages of economic development. Using a detailed matrix setting out the main subsidy policies, the type of fuel, and their main data sources, pilot studies have been completed for China, Germany, Indonesia and the United States. The project team for each country evaluated commonly referenced data sources, such as databases collected by international bodies, and summarized how each source gathers information, including an assessment of their strengths and limitations. The study found that fossil-fuel producers are supported by a multitude of policies, ranging from direct payments to preferential access to government-owned lands. While direct payments were relatively easy to identify in government budget reporting, data was not always provided at a sufficient level of disaggregation to allow proper attribution to beneficiaries. Pilot studies also found that information on these support measures was held by a variety of government ministries and non-governmental organizations. The pilot studies provide a road map and starting point for more in-depth country case studies needed to fully quantify the extent of fossil-fuel subsidies in each country, as in some areas, the financial value of producer subsidy programs can only be estimated more precisely by developing more investigative methods and conducting country-specific studies. The GSI has commissioned two such studies into producer subsidies in Indonesia and Canada, which will become available during the second half of 2010.
{"title":"Mapping the Characteristics of Producer Subsidies: A Review of Pilot Country Studies","authors":"D. Koplow, A. Jung, Lucky Lonton, Cynthia Lin, C. Charles","doi":"10.2139/SSRN.1680415","DOIUrl":"https://doi.org/10.2139/SSRN.1680415","url":null,"abstract":"This paper is published as part of the series Untold Billions: Fossil-fuel subsidies, their impacts and the path to reform. Prepared by the Global Subsidies Initiative (GSI) in conjunction with Earth Track, this study helps increase the body of knowledge about the data sources that hold information on subsidies to fossil-fuel producers, by reviewing available data in a series of countries, diverse in terms of their level of data transparency, governance systems, energy markets and stages of economic development. Using a detailed matrix setting out the main subsidy policies, the type of fuel, and their main data sources, pilot studies have been completed for China, Germany, Indonesia and the United States. The project team for each country evaluated commonly referenced data sources, such as databases collected by international bodies, and summarized how each source gathers information, including an assessment of their strengths and limitations. The study found that fossil-fuel producers are supported by a multitude of policies, ranging from direct payments to preferential access to government-owned lands. While direct payments were relatively easy to identify in government budget reporting, data was not always provided at a sufficient level of disaggregation to allow proper attribution to beneficiaries. Pilot studies also found that information on these support measures was held by a variety of government ministries and non-governmental organizations. The pilot studies provide a road map and starting point for more in-depth country case studies needed to fully quantify the extent of fossil-fuel subsidies in each country, as in some areas, the financial value of producer subsidy programs can only be estimated more precisely by developing more investigative methods and conducting country-specific studies. The GSI has commissioned two such studies into producer subsidies in Indonesia and Canada, which will become available during the second half of 2010.","PeriodicalId":176966,"journal":{"name":"ERN: Externalities; Redistributive Effects; Environmental Taxes & Subsidies (Topic)","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-09-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130288858","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The paper reviews the theory of environmental taxation under first best and second best conditions. It argues that negative environmental externalities lead to reductions of the provision of public goods, while investment in abatement increases the supply of public goods. Together with optimal tax rules, the paper therefore also derives conditions for the optimal use of resources on abatement. After brief discussions of the dimensions of time and uncertainty, tax reform and the double dividend, and taxes versus quotas, the optimal tax model is applied to the problem of global warming with a discussion of the particular incentive problems that arise in designing and implementing global climate policy.
{"title":"Atmospheric Externalities and Environmental Taxation","authors":"A. Sandmo","doi":"10.2139/ssrn.1680478","DOIUrl":"https://doi.org/10.2139/ssrn.1680478","url":null,"abstract":"The paper reviews the theory of environmental taxation under first best and second best conditions. It argues that negative environmental externalities lead to reductions of the provision of public goods, while investment in abatement increases the supply of public goods. Together with optimal tax rules, the paper therefore also derives conditions for the optimal use of resources on abatement. After brief discussions of the dimensions of time and uncertainty, tax reform and the double dividend, and taxes versus quotas, the optimal tax model is applied to the problem of global warming with a discussion of the particular incentive problems that arise in designing and implementing global climate policy.","PeriodicalId":176966,"journal":{"name":"ERN: Externalities; Redistributive Effects; Environmental Taxes & Subsidies (Topic)","volume":"9 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116840697","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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