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Who Should Bear the Administrative Costs of an Emissions Tax?

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  • John K. Stranlund

    ()
    (Department of Resource Economics, University of Massachusetts Amherst)

  • Carlos A. Chavez

    ()
    (Departmento de Economics, Universidad de Concepcion Chile)

Abstract

All environmental policies involve administrative costs, the costs of implementing and managing policies that extend beyond abatement costs. We examine theoretically the optimal distribution of these costs between the public and regulated sources of pollution. The distribution of administrative costs affects social welfare only if public funds are more expensive than private funds, or if the distribution of administrative costs affects the size of a regulated industry. If having the public take on a larger part of administrative costs increases the size of the industry and this does not lead to lower emissions for a given emissions tax, then it is optimal to make the pollution sources bear all of the administrative costs. A necessary, but not sufficient, reason for having the public bear part of the cost burden is if aggregate emissions decrease as a result.

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Bibliographic Info

Paper provided by University of Massachusetts Amherst, Department of Resource Economics in its series Working Papers with number 2011-3.

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Length: 31 pages
Date of creation: Apr 2011
Date of revision:
Handle: RePEc:dre:wpaper:2011-3

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Web page: http://www.umass.edu/resec/
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Keywords: Emissions Taxes; Pigouvian Taxes; Administrative Costs; Pollution Control;

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References

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Cited by:
  1. Kanik, Zafer & Kucuksenel, Serkan, 2014. "The Promise of Transferable Fishing Concessions on EU Fisheries," 88th Annual Conference, April 9-11, 2014, AgroParisTech, Paris, France 170526, Agricultural Economics Society.
  2. Zafer Kanik & Serkan Kucuksenel, 2013. "The Promise of Transferable Fishing Concessions on EU Fisheries," ERC Working Papers 1312, ERC - Economic Research Center, Middle East Technical University, revised Dec 2013.

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