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Sustainability Policy and Environmental Policy

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  • John C. V. Pezzey

    ()
    (Australian National University, Centre for Resource and Environmental Studies)

Abstract

A theoretical, representative agent economy with a depletable resource stock, polluting emissions and productive capital is used to contrast environmental policy, which internalises externalised environmental values, with sustainability policy, which achieves some form of intergenerational equity. The obvious environmental policy comprises an emissions tax and a resource stock subsidy, each equal to the respective external cost or benefit. Sustainability policy comprises an incentive affecting the choice between consumption and investment, and can be a consumption tax, capital subsidy or investment subsidy, or combination thereof. Environmental policy can reduce the strength of sustainability policy needed. More specialised results are derived in a closed economy with a non-renewable resource, and in a small open economy with no environmental effects on utility.

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File URL: http://een.anu.edu.au/download_files/een0211.pdf
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Bibliographic Info

Paper provided by Australian National University, Economics and Environment Network in its series Economics and Environment Network Working Papers with number 0211.

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Length: 42 pages
Date of creation: Oct 2002
Date of revision:
Handle: RePEc:anu:eenwps:0211

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

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Keywords: sustainability; optimality; externalities; tax; policy;

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References

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Citations

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Cited by:
  1. Bazhanov, Andrei, 2008. "Sustainable growth: Compatibility between criterion and the initial state," MPRA Paper 9914, University Library of Munich, Germany.
  2. Cairns, Robert D., 2008. "Value and income," Ecological Economics, Elsevier, vol. 66(2-3), pages 417-424, June.
  3. Francisco Alvarez-Cuadrado & Ngo Van Long, 2007. "A Mixed Bentham-Rawls Criterion For Intergenerational Equity: Theory And Implications," Departmental Working Papers 2007-03, McGill University, Department of Economics.
  4. Bazhanov, Andrei V., 2010. "Sustainable growth: Compatibility between a plausible growth criterion and the initial state," Resources Policy, Elsevier, vol. 35(2), pages 116-125, June.
  5. Vouvaki, Dimitra & Xepapadeas, Anastasios, 2008. "Changes in social welfare and sustainability: Theoretical issues and empirical evidence," Ecological Economics, Elsevier, vol. 67(3), pages 473-484, October.
  6. Bazhanov, Andrei, 2008. "Sustainable growth in a resource-based economy: the extraction-saving relationship," MPRA Paper 12350, University Library of Munich, Germany.
  7. John C. V. Pezzey, 2001. "Sustainability Policy and Environmental Policy," Economics and Environment Network Working Papers 0104, Australian National University, Economics and Environment Network.
  8. Dimitra Vouvaki & Anastasios Xepapadeas, 2005. "Criteria for Assessing Sustainable Development: Theoretical Issues and Empirical Evidence for the Case of Greece," Working Papers 0511, University of Crete, Department of Economics.
  9. Valente, Simone, 2011. "Intergenerational externalities, sustainability and welfare—The ambiguous effect of optimal policies on resource depletion," Resource and Energy Economics, Elsevier, vol. 33(4), pages 995-1014.
  10. Andrei V. Bazhanov, 2008. "Maximin-optimal sustainable growth with nonrenewable resource and externalities," EERI Research Paper Series EERI_RP_2008_11, Economics and Econometrics Research Institute (EERI), Brussels.
  11. Bazhanov, Andrei, 2008. "Maximin-optimal sustainable growth in a resource-based imperfect economy," MPRA Paper 16245, University Library of Munich, Germany, revised 13 Jul 2009.
  12. Bazhanov, Andrei, 2008. "Inconsistency between a criterion and the initial conditions," MPRA Paper 6792, University Library of Munich, Germany.
  13. Robert D. Cairns, 2011. "Accounting for Sustainability: A Dissenting Opinion," Sustainability, MDPI, Open Access Journal, vol. 3(9), pages 1341-1356, August.
  14. Bazhanov, Andrei, 2008. "Sustainable growth: The extraction-saving relationship," MPRA Paper 9911, University Library of Munich, Germany.

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