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International Environmental Policy Reforms, Tax Distortions, and the Labor Market

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Author Info
Thomas Aronsson
Thomas Jonsson
Tomas Sjögren

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Abstract

This paper concerns the welfare consequences of environmental policy cooperation in a two-country economy. We assume that the countries finance their public expenditures by using distortionary taxes, and that they differ with respect to competition in the labor market. The purpose is to characterize the welfare effect of a policy reform, where the countries agree to slightly increase their expenditures on abatement. We show how the welfare effect of the policy reform depends on changes in the environmental damage, employment, and work hours. We also relate the welfare effect to the strategic interaction among the countries in the prereform equilibrium.

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Publisher Info
Article provided by Mohr Siebeck, Tübingen in its journal FinanzArchiv.

Volume (Year): 62 (2006)
Issue (Month): 2 (June)
Pages: 199-217
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Handle: RePEc:mhr:finarc:urn:sici:0015-2218(200606)62:2_199:ieprtd_2.0.tx_2-a

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Related research
Keywords: policy cooperation; distortionary taxes; labor market; Nash game; Stackelberg game;

Find related papers by JEL classification:
H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
J60 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - General

Cited by:
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  1. Aronsson, Thomas & Backlund, Kenneth & Sahlén, Linda, 2006. "Technology Transfers and the Clean Development Mechanism in a North-South General Equilibrium Model," UmeÃ¥ Economic Studies 697, Umeå University, Department of Economics. [Downloadable!]
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This page was last updated on 2009-12-27.

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