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Is Pollution a Giffen Good? General-Equilibrium Analysis and Some Policy Implications

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  • Vasilev, Aleksandar

Abstract

This paper takes a simple model with pollution and environmental quality and derives some novel results. In particular, pollution is shown to be a Giffen good. This is a very important finding with clear policy implications, namely that carbon taxes (and pollution permits) are counter-productive, as they lead to increase in pollution, and instead governments should administratively set emission caps.

Suggested Citation

  • Vasilev, Aleksandar, 2019. "Is Pollution a Giffen Good? General-Equilibrium Analysis and Some Policy Implications," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 0(3(35)), pages 488-490.
    • Handle: RePEc:zbw:espost:200501
    DOI: 10.14505/jemt.v10.3(35).02
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    More about this item

    Keywords

    pollution; carbon tax; Giffen good;
    All these keywords.

    JEL classification:

    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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