Carbon Taxation When Climate Affects Productivity
AbstractBased on a model where climate change affects productivity, the second-best optimal carbon tax is found to exceed marginal social damage by 53% and ‘‘marginal private damage’’ (aggregate households’ willingness to pay) by 73%. Annual welfare gains are estimated at $3.58 billion when marginal damage is $40 per ton; employment also increases. A carbon tax set at the Pigouvian rate raises welfare by only $3.17 billion. The seemingly contradictory results from the ‘‘tax interaction’’ literature are shown to arise only when the optimal environmental tax is compared to ‘‘marginal private damage,’’ and only for an amenity externality.
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 University of Wisconsin Press in its journal Land Economics.
Volume (Year): 78 (2002)
Issue (Month): 3 ()
Contact details of provider:
Web page: http://le.uwpress.org/
Find related papers by JEL classification:
- Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Goodstein, Eban, 2002. "Labor supply and the double-dividend," Ecological Economics, Elsevier, vol. 42(1-2), pages 101-106, August.
- Iain Fraser & Robert Waschik, 2010.
"The Double Dividend Hypothesis in a CGE Model: Specific Factors and Variable Labour Supply,"
2010.02, School of Economics, La Trobe University.
- Iain Fraser & Robert Waschik, 2010. "The Double Dividend Hypothesis in a CGE Model: Specific Factors and Variable Labour Supply," Studies in Economics 1001, Department of Economics, University of Kent.
- Eban Goodstein, 2003. "The Death of the Pigovian Tax? Policy Implications from the Double-Dividend Debate," Land Economics, University of Wisconsin Press, vol. 79(3), pages 402-414.
- Patuelli, Roberto & Nijkamp, Peter & Pels, Eric, 2005. "Environmental tax reform and the double dividend: A meta-analytical performance assessment," Ecological Economics, Elsevier, vol. 55(4), pages 564-583, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.