The polluter-doesn't-pay principle
AbstractBy granting discounts on environmental taxes to heavy polluting firms, the government is missing out on significant tax revenues and achieving considerably less in reducing greenhouse gas emissions. That is the central conclusion of research by Ralf Martin and colleagues, which reveals the failings of the UK's climate change levy. Their study shows that firms that enjoy a discount from the levy, claiming that such measures damage their ability to compete in the global economy, do not in fact face higher risks to their competitiveness. Firms that pay the full climate change levy reduce their energy use and their emissions by more than those that get a tax discount.
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Bibliographic InfoPaper provided by Centre for Economic Performance, LSE in its series CentrePiece - The Magazine for Economic Performance with number 369.
Date of creation: May 2012
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Web page: http://cep.lse.ac.uk/centrepiece/
Industry compensation; industrial relocation; emissions trading; permit allocation; EUETS; firm data;
Find related papers by JEL classification:
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
- Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Costs; Distributional Effects; Employment Effects
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-06-05 (All new papers)
- NEP-ENE-2012-06-05 (Energy Economics)
- NEP-ENV-2012-06-05 (Environmental Economics)
- NEP-RES-2012-06-05 (Resource Economics)
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