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Green Policies and Public Finance in a Small Open Economy

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Author Info
Bovenberg, A Lans
van der Ploeg, Frederick

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Abstract

We explore the effects of greener preferences for the public finances, employment, and the domestic capital stock in a second-best framework. We find that greener preferences typically result in capital flight. Also, employment declines despite the factor substitution that is induced by a lower tax on labor and a higher tax on natural resources. If the uncompensated wage elasticity of labor supply is positive, private utility declines. Public consumption, in contrast, may rise if most of the improvement in environmental quality occurs through a lower level rather than a cleaner composition of economic activity. However, if the labor supply curve bends backwards, private utility rises while public consumption falls. Copyright 1994 by The editors of the Scandinavian Journal of Economics.

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

Volume (Year): 96 (1994)
Issue (Month): 3 ()
Pages: 343-63
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Handle: RePEc:bla:scandj:v:96:y:1994:i:3:p:343-63

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  3. Annegrete Bruvoll, Torstein Bye, Jan Larsson and Kjetil Telle, 2003. "Technological changes in the pulp and paper industry and the role of uniform versus selective environmental policy," Discussion Papers 357, Research Department of Statistics Norway. [Downloadable!]
  4. Thomas Aronsson, 1999. "On Cost Benefit Rules for Green Taxes," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 13(1), pages 31-43, January. [Downloadable!] (restricted)
  5. Brita Bye and Karine Nyborg, 1999. "The Welfare Effects of Carbon Policies: Grandfathered Quotas versus Differentiated Taxes," Discussion Papers 261, Research Department of Statistics Norway. [Downloadable!]
  6. Conrad, Klaus & Schmidt, Tobias F. N., 1997. "Double dividend of climate protection and the role of international policy coordination in the EU : an applied general equilibrium analysis with the GEM-E3 model," ZEW Discussion Papers 97-26, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  7. Bosello, Francesco & Carraro, Carlo & Galeotti, Marzio, 1999. "The Double Dividend Issue: Modelling Strategies and Empirical Findings," CEPR Discussion Papers 2117, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  8. Emmanuel Athanassiou & Christos Kollias & Stavros Zografakis, 2002. "The Effects of Defence Spending Reductions: A CGE Estimation of the Foregone Peace Dividend in the Case of Greece," Defence and Peace Economics, Taylor and Francis Journals, vol. 13(2), pages 109-119, January. [Downloadable!] (restricted)
  9. A. Bovenberg & Frederick Van der Ploeg, 1998. "Consequences of Environmental Tax Reform for Unemployment and Welfare," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 12(2), pages 137-150, September. [Downloadable!] (restricted)
  10. A. Bovenberg, 1999. "Green Tax Reforms and the Double Dividend: an Updated Reader's Guide," International Tax and Public Finance, Springer, vol. 6(3), pages 421-443, August. [Downloadable!] (restricted)
  11. Laura Marsiliani & Thomas Renstrom, 2002. "Environmental Policy and Capital Movements: The Role of Government Commitment," Wallis Working Papers WP31, University of Rochester - Wallis Institute of Political Economy. [Downloadable!]
  12. Annegrete Bruvoll & Karin Ibenholt, 1998. "Green Throughput Taxation: Environmental and Economic Consequences," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 12(4), pages 387-401, December. [Downloadable!] (restricted)
  13. Eskeland, Gunnar S., 2000. "Public expenditures and environmental protection : when is the cost of funds irrelevant?," Policy Research Working Paper Series 2507, The World Bank. [Downloadable!]
  14. S. Proost & D. Regemorter, 1995. "The double dividend and the role of inequality aversion and macroeconomic regimes," International Tax and Public Finance, Springer, vol. 2(2), pages 207-219, August. [Downloadable!] (restricted)
  15. Marsiliani, Laura & Renström, Thomas I, 2003. "Environmental Policy and Capital Movements: The Role of Government Commitment," CEPR Discussion Papers 3727, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  16. Miguel Rodríguez & Eduardo L. Giménez, 2006. "Pigou’s Dividend versus Ramsey’s Dividend in the Double Dividend Literature," Working Papers 2006.85, Fondazione Eni Enrico Mattei. [Downloadable!]
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  18. Reto Schleiniger, . "Ecological Tax Reform with Exemptions for the Export Sector in a two Sector two Factor Model," IEW - Working Papers iewwp029, Institute for Empirical Research in Economics - IEW. [Downloadable!]
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