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Environmental abatement and intergenerational distribution

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  • Bovenberg, A. Lans
  • Heijdra, Ben J.

    (Groningen University)

Abstract

This paper employs an overlapping generations model to explore the impact of public abatement on private investment and the intergenerational distribution of welfare. Whereas public abatement benefits old generations in terms of non-environmental welfare, future generations gain most in terms of environmental welfare. The overall benefits tend to be smallest for generations born at the time of the unanticipated policy shock. Public debt policy, however, can be employed to ensure that welfare gains are distributed more equally across the various generations. Such a policy implies that natural capital crowds out man-made capital.

Suggested Citation

  • Bovenberg, A. Lans & Heijdra, Ben J., 1999. "Environmental abatement and intergenerational distribution," CCSO Working Papers 199907, University of Groningen, CCSO Centre for Economic Research.
    • Handle: RePEc:gro:rugccs:199907
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    More about this item

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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