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Pollution Tax (pollution + tax)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	75%

Selected Abstracts

Pollution Abatement Investment When Environmental Regulation Is Uncertain

JOURNAL OF PUBLIC ECONOMIC THEORY, Issue 2 2000
Y.H. Farzin
In a dynamic model of a risk-neutral competitive firm that can lower its pollution emissions per unit of output by building up abatement capital stock, we examine the effect of a higher pollution tax rate on abatement investment both under full certainty and when the timing or the size of the tax increase is uncertain. We show that a higher pollution tax encourages abatement investment if it does not exceed a certain threshold rate. However, akin to the Diamond-Mirrlees tax anomaly, it is possible that a higher pollution tax rate results in more pollution. The magnitude uncertainty discourages abatement investment, but at the time of the actual tax increase the abatement investment path may shift either upward or downward. On the other hand, when the timing is uncertain, the abatement investment path always jumps upward, thus suggesting that the effect of magnitude uncertainty on the optimal investment path may be more pronounced than that of timing uncertainty. Further, we show that the ad hoc practice of raising the discount rate to account for the uncertainty leads to underinvestment in abatement capital. We show how the size of this underinvestment bias varies with the future tax increase. Finally, we show that a credible threat to accelerate the tax increase can induce more abatement investment. [source]

Trade Union Preferences in Double Dividend Models

LABOUR, Issue 3 2001
Torsten Sløk
This paper analyses wage formation in a unionized economy where consumers as an externality in their utility function have the level of local pollution. If modelled in a microeconomically consistent way this externality should also be present in the preferences of the trade union. The key result is that when this trade-off between pollution and employment is included in the trade unions' preferences then they are willing to lower wages to generate substitution towards higher employment and lower pollution. As a consequence, an increase in the pollution tax will lead to lower wages. At a more general level the results show that in models analyzing pollution issues, such as the double dividend literature, it is very important for the policy conclusions how trade unions are introduced. [source]

The distributional effects of carbon and energy taxes: the cases of France, Spain, Italy, Germany and UK

ENVIRONMENTAL POLICY AND GOVERNANCE, Issue 4 2002
Dr. E. J. Symons
This paper examines the likely immediate impact effect of some pollution taxes on the tax burden of households in a number of European countries. The total effect on households of such taxes is assessed using input,output analysis. Thus both the direct effect of taxes, through increased fuel prices, and the indirect effect, through increased prices of other goods, can be assessed simultaneously. This input,output approach allows the generation of direct plus indirect pollution intensities for all household consumption categories, for, in principle, a number of pollutants (CO2, SO2, NOx, particulates). These intensities could then be used to assess the impact on households of pollution taxes. This paper concentrates on CO2 and energy, performing a static analysis of the effect of a tax on the carbon or energy content of goods using the known consumption patterns for the various countries, both in aggregate and for different income groups. This allows a first assessment of the regressive/progressive effects of such taxes and an indication of consumer welfare loss. Copyright © 2002 John Wiley & Sons, Ltd and ERP Environment. [source]

Policy-Induced Technology Adoption: Evidence from the U.S. Lead Phasedown

THE JOURNAL OF INDUSTRIAL ECONOMICS, Issue 3 2003
Suzi Kerr
Theory suggests that economic instruments, such as pollution taxes or tradable permits, can provide more efficient technology adoption incentives than conventional regulatory standards. We explore this issue for an important industry undergoing dramatic decreases in allowed pollution , the U.S. petroleum industry's phasedown of lead in gasoline. Using a duration model applied to a panel of refineries from 1971,1995, we find that the pattern of technology adoption is consistent with an economic response to market incentives, plant characteristics, and alternative policies. Importantly, evidence suggests that the tradable permit system used during the phasedown provided incentives for more efficient technology adoption decisions. [source]