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EmissionTaxes and Tradable Permits: A Comparison of views on Long Run Efficiency

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Author Info
John C. V. Pezzey () (Australian National University, Centre for Resource and Environmental Studies)
Abstract

We compare three different views on the long run efficiencies of emission taxes which include thresholds, and of tradable emission permits where some permits are initially free. The differences are caused by different assumptions about whether thresholds and free permits should be subsidies given only to firms that produce, or full property rights. Treating tax thresholds, as well as free permits, as property rights would depart from the conventional view, but would allow greater flexibility in making economic instruments both efficient and acceptable. Such flexibility could be very important in achieving efficent control of greenhouse gas emissions.

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File URL: http://een.anu.edu.au/download_files/een0210.pdf
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Publisher Info
Paper provided by Australian National University, Economics and Environment Network in its series Economics and Environment Network Working Papers with number 0210.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 20 pages
Date of creation: Jun 2002
Date of revision:
Handle: RePEc:anu:eenwps:0210

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Web page: http://een.anu.edu.au/

For technical questions regarding this item, or to correct its listing, contact: (Jack Pezzey).

Related research
Keywords: emission taxes; tradable permits; thresholds; exemptions; efficiency;

Find related papers by JEL classification:
H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

References listed on IDEAS
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.:

  1. 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)
  2. John Pezzey, 1992. "The Symmetry between Controlling Pollution by Price and Controlling It by Quantity," Canadian Journal of Economics, Canadian Economics Association, vol. 25(4), pages 983-91, November. [Downloadable!] (restricted)
  3. Spulber, Daniel F., 1985. "Effluent regulation and long-run optimality," Journal of Environmental Economics and Management, Elsevier, vol. 12(2), pages 103-116, June. [Downloadable!] (restricted)
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    Other versions:
  6. Carlton, Dennis W & Loury, Glenn C, 1980. "The Limitations of Pigouvian Taxes as a Long-Run Remedy for Externalities," The Quarterly Journal of Economics, MIT Press, vol. 95(3), pages 559-66, November. [Downloadable!] (restricted)
  7. Paul Ekins & Stefan Speck, 1999. "Competitiveness and Exemptions From Environmental Taxes in Europe," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 13(4), pages 369-396, June. [Downloadable!] (restricted)
  8. Lawrence H. Goulder & Ian W.H. Parry & Dallas Burtraw, 1997. "Revenue-Raising versus Other Approaches to Environmental Protection: The Critical Significance of Preexisting Tax Distortions," RAND Journal of Economics, The RAND Corporation, vol. 28(4), pages 708-731, Winter. [Downloadable!] (restricted)
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  12. Jensen, Jesper & Rasmussen, Tobias N., 2000. "Allocation of CO2 Emissions Permits: A General Equilibrium Analysis of Policy Instruments," Journal of Environmental Economics and Management, Elsevier, vol. 40(2), pages 111-136, September. [Downloadable!] (restricted)
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    Other versions:
  14. Farrow, Scott, 1995. "The dual political economy of taxes and tradable permits," Economics Letters, Elsevier, vol. 49(2), pages 217-220, August. [Downloadable!] (restricted)
  15. Pizer, William, 1997. "Prices vs. Quantities Revisited: The Case of Climate Change," Discussion Papers dp-98-02, Resources For the Future. [Downloadable!]
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  18. Kling, Catherine L. & Zhao, Jinhua, 2000. "On the Long-Run Efficiency of Auctioned vs. Free Permits," Staff General Research Papers 1836, Iowa State University, Department of Economics. [Downloadable!]
    Other versions:
  19. Margaret Wilkinson, 1994. "Paying for public spending: is there a role for earmarked taxes?," Fiscal Studies, Institute for Fiscal Studies, vol. 15(4), pages 119-35, November. [Downloadable!]
  20. Stavins, Robert N, 1998. "What Can We Learn from the Grand Policy Experiment? Lessons from SO2 Allowance Trading," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 69-88, Summer. [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.)

  1. John Pezzey, 2003. "Emission Taxes and Tradeable Permits A Comparison of Views on Long-Run Efficiency," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 26(2), pages 329-342, October. [Downloadable!] (restricted)
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