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Economic Effects of Environmental Taxation on Chemical Fertilizers

Author

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  • Kim, Chang-Gil
  • Stoecker, Arthur L.

Abstract

This paper analyzes the economic effects of environmental taxes on chemical fertilizer in producing rice. A charge of 10 percent tax on nitrogen fertilizer leads to a reduction in fertilizer use of 1.5 percent without changing rice yield, but the farm income is reduced by 0.6 percent. The tax rate of 100 percent leads to a reduction of 14.6 percent in fertilizer use, a 0.4 percent reduction in rice yield, and a 3.6 percent reduction in farm income. A significant feature of eco-taxes imposed on chemical fertilizers is their revenue potential, which could contribute to increasing government budgets for finance pollution control programs, such as education and R&D. This study provides an insight into the application of market-based instrument to achieve sustainable agricultural development.

Suggested Citation

  • Kim, Chang-Gil & Stoecker, Arthur L., 2006. "Economic Effects of Environmental Taxation on Chemical Fertilizers," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25501, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae06:25501
    DOI: 10.22004/ag.econ.25501
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    File URL: https://ageconsearch.umn.edu/record/25501/files/cp061013.pdf
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    Cited by:

    1. Mintz, Mordekhay & Portnov, Boris A., 2023. "Social and environmental factors affecting the amount of property taxes collected by local authorities in Israel," Land Use Policy, Elsevier, vol. 133(C).

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    Keywords

    Environmental Economics and Policy;

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