Pollution Control Policy: A Dynamic Taxation Scheme
AbstractIn this paper we investigate a dynamic setting of environmental taxation, for which the government imposes a tax rate in order to internalize externalities caused by polluting firms. The basic model consists of the intertemporal maximization problem for an additively separable utility which is subject to the pollution accumulation constraint. We analyze some various aspects of the same setting such as the leader-follower, the social planning and the simultaneous move game. The model is very simple and has some similarities with capital taxation models. The crucial variables of the model are the tax rate as a control and the pollution stock as a state. We discuss a scheme in which polluters adopt Markovian emission strategies with respect to the flows, and the tax rate imposed is, in the most cases, a constant depending on the discount rate. Moreover, computing the time paths for the control and state variables, the welfare index analysis, that follows, reveals substantial inefficiencies caused by th e leader-follower setting, compared with the social planning optimal control setting.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies in its journal Czech Economic Review.
Volume (Year): 6 (2012)
Issue (Month): 1 (March)
Find related papers by JEL classification:
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Benchekroun, Hassan & van Long, Ngo, 1998.
"Efficiency inducing taxation for polluting oligopolists,"
Journal of Public Economics,
Elsevier, vol. 70(2), pages 325-342, November.
- Hassan Benchekroun & Ngo Van Long, 1997. "Efficiency Inducing Taxation for Polluting Oligopolists," CIRANO Working Papers 97s-21, CIRANO.
- Alesina, Alberto & Rodrik, Dani, 1994.
"Distributive Politics and Economic Growth,"
The Quarterly Journal of Economics,
MIT Press, vol. 109(2), pages 465-90, May.
- Alesina, Alberto F & Rodrik, Dani, 1991. "Distributive Politics and Economic Growth," CEPR Discussion Papers 565, C.E.P.R. Discussion Papers.
- Alberto Alesina & Dani Rodrik, 1991. "Distributive Politics and Economic Growth," NBER Working Papers 3668, National Bureau of Economic Research, Inc.
- Rodrik, Dani & Alesina, Alberto, 1994. "Distributive Politics and Economic Growth," Scholarly Articles 4551798, Harvard University Department of Economics.
- Mäler, K-G. & Xepapadeas, A. & Zeeuw, A.J. de, 2003.
"The economics of shallow lakes,"
Open Access publications from Tilburg University
urn:nbn:nl:ui:12-123314, Tilburg University.
- Dockner Engelbert J. & Van Long Ngo, 1993. "International Pollution Control: Cooperative versus Noncooperative Strategies," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages 13-29, July.
- Farzin, Y. H., 1996. "Optimal pricing of environmental and natural resource use with stock externalities," Journal of Public Economics, Elsevier, vol. 62(1-2), pages 31-57, October.
- Krusell, Per, 2002. "Time-consistent redistribution," European Economic Review, Elsevier, vol. 46(4-5), pages 755-769, May.
- Karp, Larry S. & Lee, In Ho, 2000.
CUDARE Working Paper Series
919, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
- Karp, Larry & Lee, In Ho, 2000. "Time-Consistent Policies," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt94q3m5mq, Department of Agricultural & Resource Economics, UC Berkeley.
- Danyang Xie, 2002.
"On Time Inconsistency: A Technical Issue in Stackelberg Differential Games,"
- Xie, Danyang, 1997. "On Time Inconsistency: A Technical Issue in Stackelberg Differential Games," Journal of Economic Theory, Elsevier, vol. 76(2), pages 412-430, October.
- Ngo Long & Antoine Soubeyran, 2005.
"Selective penalization of polluters: an inf-convolution approach,"
Springer, vol. 25(2), pages 421-454, 02.
- Ngo Van Long & Antoine Soubeyran, 2002. "Selective Penalization Of Polluters: An Inf-Convolution Approach," CIRANO Working Papers 2002s-40, CIRANO.
- Kemp, Murray C & Long, Ngo Van & Shimomura, Koji, 1993. "Cyclical and Noncyclical Redistributive Taxation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(2), pages 415-29, May.
- Xepapadeas, A. P., 1992. "Environmental policy, adjustment costs, and behavior of the firm," Journal of Environmental Economics and Management, Elsevier, vol. 23(3), pages 258-275, November.
- Dockner,Engelbert J. & Jorgensen,Steffen & Long,Ngo Van & Sorger,Gerhard, 2000. "Differential Games in Economics and Management Science," Cambridge Books, Cambridge University Press, number 9780521637329, October.
- Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-91, June.
- Ines Lindner & Holger Strulik, 2004. "Distributive politics and economic growth: the Markovian Stackelberg solution," Economic Theory, Springer, vol. 23(2), pages 439-444, January.
- Cohen, Daniel & Michel, Philippe, 1988. "How Should Control Theory Be Used to Calculate a Time-Consistent Government Policy?," Review of Economic Studies, Wiley Blackwell, vol. 55(2), pages 263-74, April.
- Halkos, George & Papageorgiou, George, 2012. "Pollution abatement and reservation prices in a market game," MPRA Paper 42150, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lenka Stastna).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.