Consequences of Environmental Tax Reform for Unemployment and Welfare

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Consequences of Environmental Tax Reform for Unemployment and Welfare

Author Info

A. Bovenberg
Frederick Van der Ploeg

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Abstract

We investigate the welfare effects of environmental tax reform, i.e. raising environmental taxes and using the proceeds to reduce distortionary taxes on labour. The framework of analysis is a small open economy with involuntary unemployment due to a rigid consumer wage. Environmental tax reform boosts not only environmental quality but also employment if substitution between labour and resources is easy, the production share of the fixed factor is large, and the initial tax rates on resources and profits are small. If the initial tax system is sub-optimal with a negligible tax on resources, profits rise as well. Copyright Kluwer Academic Publishers 1998

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Publisher Info
Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 12 (1998)
Issue (Month): 2 (September)
Pages: 137-150
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Handle: RePEc:kap:enreec:v:12:y:1998:i:2:p:137-150

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Bovenberg, A Lans & van der Ploeg, Frederick, 1994. " Green Policies and Public Finance in a Small Open Economy," Scandinavian Journal of Economics, Blackwell Publishing, vol. 96(3), pages 343-63.
Parry Ian W. H., 1995. "Pollution Taxes and Revenue Recycling," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages S64-S77, November. [Downloadable!] (restricted)
Goulder Lawrence H., 1995. "Effects of Carbon Taxes in an Economy with Prior Tax Distortions: An Intertemporal General Equilibrium Analysis," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages 271-297, November. [Downloadable!] (restricted)
Neary, J. P. & Roberts, K. W. S., 1980. "The theory of household behaviour under rationing," European Economic Review, Elsevier, vol. 13(1), pages 25-42, January. [Downloadable!] (restricted)
Other versions:
- Neary, J.P & Roberts, K.W.S, 1978. "The Theory of Household Behaviour under Rationing," The Warwick Economics Research Paper Series (TWERPS) 132, University of Warwick, Department of Economics.
Bovenberg, A Lans & van der Ploeg, Frederick, 1992. "Environmental Policy, Public Finance and the Labour Market in a Second-best World," CEPR Discussion Papers 745, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Other versions:
- Bovenberg, A.L. & Van Der Ploeg, F., 1992. "Environmental Policy, Public Finance and the Labour Market in a Second- Best World," Papers 9243, Tilburg - Center for Economic Research.
- Bovenberg, A. L. & van der Ploeg, F., 1994. "Environmental policy, public finance and the labour market in a second-best world," Journal of Public Economics, Elsevier, vol. 55(3), pages 349-390, November. [Downloadable!] (restricted)

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(explanations, 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.)

Parry, Ian, 2003. "Fiscal Interactions and the Case for Carbon Taxes over Grandfathered Carbon Permits," Discussion Papers dp-03-46, Resources For the Future. [Downloadable!]
Other versions:
- Ian W. H. Parry, 2003. "Fiscal Interactions and the Case for Carbon Taxes Over Grandfathered Carbon Permits," Oxford Review of Economic Policy, Oxford University Press, vol. 19(3), pages 385-399.
Brita Bye & Snorre Kverndokk & Knut Rosendahl, 2002. "Mitigation costs, distributional effects, and ancillary benefits of carbon policies in the Nordic countries, the U.K., and Ireland," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 7(4), pages 339-366, December. [Downloadable!] (restricted)
Parry, Ian & Bento, Antonio, 1999. "Tax deductions, environmental policy, and the"double dividend"hypothesis," Policy Research Working Paper Series 2119, The World Bank. [Downloadable!]
Other versions:
- Parry, Ian W. H. & Bento, Antonio M., 2000. "Tax Deductions, Environmental Policy, and the "Double Dividend" Hypothesis," Journal of Environmental Economics and Management, Elsevier, vol. 39(1), pages 67-96, January. [Downloadable!] (restricted)
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)
Boeters, Stefan, 2001. "Green tax reform and employment : the interaction of profit and factor taxes," ZEW Discussion Papers 01-45, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
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- Stefan Boeters, 2004. "Green Tax Reform and Employment: The Interaction of Profit and Factor Taxes," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 60(2), pages 222-, August.
Parry, Ian & Bento, Antonio, 1999. "Tax Deductible Spending, Environmental Policy, and the "Double Dividend" Hypothesis," Discussion Papers dp-99-24, Resources For the Future. [Downloadable!]
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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- Eduardo L. Giménez Fernández & Miguel Rodríguez Méndez, 2006. "Pigou's Dividend versus Ramsey's Dividend in the Double Dividend Literature," Economic Working Papers at Centro de Estudios Andaluces E2006/08, Centro de Estudios Andaluces. [Downloadable!]
- : Eduardo L. Giménez (a) & Miguel Rodríguez, . "Pigou’S Dividend Versus Ramsey’S Dividend In The Double Dividend Literature," Working Papers 2-06 Classification-JEL :, Instituto de Estudios Fiscales. [Downloadable!]
Kverndokk,S. & Rosendahl,E., 2000. "CO2 mitigation costs and ancillary benefits in the Nordic countries, the UK and Ireland : a survey," Memorandum 34/2000, Oslo University, Department of Economics. [Downloadable!]
Boone, J. & Bovenberg, L., 2000. "Optimal labour taxation and search," Discussion Paper 17, Tilburg University, Center for Economic Research. [Downloadable!]
Other versions:
- Boone, Jan & Bovenberg, A Lans, 2001. "Optimal Labour Taxation and Search," CEPR Discussion Papers 3002, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
- Boone, Jan & Bovenberg, Lans, 2002. "Optimal labour taxation and search," Journal of Public Economics, Elsevier, vol. 85(1), pages 53-97, July. [Downloadable!] (restricted)
Ahiabu, Stephen, 2006. "Inflation and the underground economy," MPRA Paper 763, University Library of Munich, Germany, revised Nov 2006. [Downloadable!]
Eismont Oleg & Logvin Aleksey & Petrov Anatoly, 2002. "Estimation of Timber Rent and the Efficiency of Increasing Rental Payments in Russia," EERC Working Paper Series 01-13e, EERC Research Network, Russia and CIS. [Downloadable!]
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)
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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- Bosello, Francesco & Carraro, Carlo & Galeotti, Marzio, 2001. "The double dividend issue: modeling strategies and empirical findings," Environment and Development Economics, Cambridge University Press, vol. 6(01), pages 9-45, February. [Downloadable!]
Koschel, Henrike, 2000. "Substitution elasticities between capital, labour, material, electricity and fossil fuels in German producing and service sectors," ZEW Discussion Papers 00-31, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
Thomas Conefrey & John Fitz Gerald & Laura Malaguzzi Valeri & Richard S. J. Tol, 2008. "The Impact of a Carbon Tax on Economic Growth and Carbon Dioxide Emissions in Ireland," Papers WP251, Economic and Social Research Institute (ESRI). [Downloadable!]

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