Green taxation and individual responsibility
AbstractThe current article aims at studying the eÂ¤ects of taxation on environ- mental quality, in an economy where its agents are responsible. Individual responsibility towards nature is modelized by the voluntary effort to which the households have agreed insofar as the improvement of environmental quality is concerned. Given that such effort is taken from one's allocated time for leisure, its opportunity cost is that of the sacrificed time for leisure, and is therefore equal to the individual's wage. We shall highlight that State intervention through the introduction of a (green) tax always crowds out indi- vidual responsibility. However, the intensity of this crowding-out depends on the performance of the State. Moreover, State intervention could, depending on the amount of crowding-out, reduce the overall quality of the environment. In a general equilibrium setting, we show that the crowding-out eÂ¤ect is not systematic. This is because there will then be an interaction between eÂ¤ort (or work time) and the cost of that eÂ¤ort (linked to the individual's wage, and therefore to production and finally to work/effort). In this article, we shall discuss the conditions under which public policy crowds out individual responsibility within this context.
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Bibliographic InfoArticle provided by Elsevier in its journal Ecological Economics.
Volume (Year): 63 (2007)
Issue (Month): 4 (September)
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Web page: http://www.elsevier.com/locate/ecolecon
Other versions of this item:
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
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