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Environmental policy, public goods and the marginal cost of public funds

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  • Ploeg, F. van der
  • Bovenberg, A.L.

    (Tilburg University, Center for Economic Research)

Abstract

If private goods are perfect substitutes for public goods and environmental quality, greener preferences reduce employment, raise abatement, and improve environmental quality. If the elasticity of substitution between private goods and leisure exceeds one, the tax rate increases, thereby reducing private consumption. However, if labor supply bends backwards, private utility rises while the tax rate and public consumption fall. With imperfect substitution between private and public consumption, greener policies boost labor supply if the substitution elasticity between private and public consumption and the elasticity of the effectiveness of public abatement are small and the labor supply curve bends backwards. Copyright 1994 by Royal Economic Society.

(This abstract was borrowed from another version of this item.)

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Bibliographic Info

Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 1993-45.

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Date of creation: 1993
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Handle: RePEc:dgr:kubcen:199345

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Web page: http://center.uvt.nl

Related research

Keywords: Environment; Taxation; Public Goods; Consumption;

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  1. repec:hal:cesptp:halshs-00601768 is not listed on IDEAS
  2. repec:hal:cesptp:halshs-00089916 is not listed on IDEAS
  3. Mireille Chiroleu-Assouline & Mouez Fodha, 2011. "Verdissement de la fiscalité. À qui profite le double dividende ?," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(1), pages 409-431.
  4. repec:hal:cesptp:halshs-00089895 is not listed on IDEAS
  5. Chiroleu-Assouline, Mireille & Fodha, Mouez, 2006. "Double dividend hypothesis, golden rule and welfare distribution," Journal of Environmental Economics and Management, Elsevier, vol. 51(3), pages 323-335, May.
  6. repec:hal:journl:halshs-00089916 is not listed on IDEAS
  7. Juan González Alegre, 2012. "An evaluation of EU regional policy. Do structural actions crowd out public spending?," Public Choice, Springer, vol. 151(1), pages 1-21, April.
  8. William Jaeger, 2011. "The Welfare Effects of Environmental Taxation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 49(1), pages 101-119, May.
  9. F. Barigozzi & B. Villeneuve, 2001. "Influencing the Misinformed Misbehaver: An Analysis of Public Policy towards Uncertainty and External Effects," Working Papers 404, Dipartimento Scienze Economiche, Universita' di Bologna.
  10. Bayindir-Upmann, Thorsten, 1998. "Interjurisdictional competition in emission taxes under imperfect competition of local firms," European Journal of Political Economy, Elsevier, vol. 14(2), pages 345-368, May.
  11. Andersen, Torben M. & Rasmussen, Bo Sandemann & Sorensen, Jan Rose, 1996. "Optimal fiscal policy in open economies with labour market distortions," Journal of Public Economics, Elsevier, vol. 63(1), pages 103-117, December.
  12. Schöb, Ronnie, 2009. "Climate policy: choosing the right instrument to reap an additional employment dividend," Discussion Papers 2009/10, Free University Berlin, School of Business & Economics.
  13. Ronnie Schöb, 2003. "The Double Dividend Hypothesis of Environmental Taxes: A Survey," CESifo Working Paper Series 946, CESifo Group Munich.

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