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Pollution Taxation and Revenue Recycling under Monopoly Unions

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Author Info
 Strand, Jon
Abstract

A model where a given number of firms determine their pollution-reducing production technologies upon establishment and workers form monopoly unions is used to study the possibility of "double dividends," i.e., simultaneous reductions in pollution and increases in employment, when the pollution tax is increased, and tax revenues recycled, in alternative ways. In all cases pollution is reduced. When output is subsidized, the effect of a pollution tax increase on employment is always neutral. When employment, and investments, are subsidized, employment increases when investments are, respectively, relatively insensitive and sensitive to pollution taxes. Of the three subsidy instruments, the employment subsidy is always the most, and the investment subsidy the least efficient solution. Copyright 1998 by The editors of the Scandinavian Journal of Economics.

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Article provided by Blackwell Publishing in its journal Scandinavian Journal of Economics.

Volume (Year): 100 (1998)
Issue (Month): 4 (December)
Pages: 765-80
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Handle: RePEc:bla:scandj:v:100:y:1998:i:4:p:765-80

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  1. Jon Strand, 1999. "Efficient Environmental Taxation Under Worker-Firm Bargaining," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 13(2), pages 125-141, March. [Downloadable!] (restricted)
  2. Anthony Letsoalo & James Blignaut & Theuns de Wet & Martin de Wit & Sebastiaan Hess & Richard S.J. Tol & Jan van Heerden, 2005. "Triple Dividends Of Water Consumption Charges In South Africa," Working Papers FNU-62, Research unit Sustainability and Global Change, Hamburg University, revised Apr 2005. [Downloadable!]
  3. Thorsten Bayındır-Upmann, 2004. "On the Double Dividend under Imperfect Competition," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 28(2), pages 169-194, June. [Downloadable!] (restricted)
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