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Environmental Abatement and Intergenerational Redistribution

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  • A. Lans Bovenberg
  • Ben J. Heijdra

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 the oldest generations in terms of non-environmental welfare, future generations gain most in terms of environmental welfare. The overall benefits tend to be smallest for the 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.

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Paper provided by Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics in its series EPRU Working Paper Series with number 00-08.

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Handle: RePEc:kud:epruwp:00-08

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  1. repec:sae:niesru:v:149:y::i:1:p:30-52 is not listed on IDEAS
  2. Fisher, Walter H & Turnovsky, Stephen J, 1998. "Public Investment, Congestion, and Private Capital Accumulation," Economic Journal, Royal Economic Society, vol. 108(447), pages 399-413, March.
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  5. Bovenberg, A. Lans & Heijdra, Ben J., 1999. "Environmental abatement and intergenerational distribution," Research Report 99C63, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
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Citations

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Cited by:
  1. Ben J. Heijdra & Pim Heijnen, 2009. "Environmental Policy and the Macroeconomy under Shallow-Lake Dynamics," CESifo Working Paper Series 2859, CESifo Group Munich.
  2. Xavier Pautrel, 2009. "Environmental policy, education and growth: A reappraisal when lifetime is finite," Working Papers hal-00423201, HAL.
  3. Heijnen, P. & Wagener, F.O.O., 2013. "Avoiding an ecological regime shift is sound economic policy," Journal of Economic Dynamics and Control, Elsevier, vol. 37(7), pages 1322-1341.
  4. Habla, Wolfgang & Roeder, Kerstin, 2013. "Intergenerational aspects of ecotax reforms - An application to Germany," Munich Reprints in Economics 20469, University of Munich, Department of Economics.
  5. Bovenberg, A. Lans & Heijdra, Ben J., 1999. "Environmental abatement and intergenerational distribution," CCSO Working Papers 199907, University of Groningen, CCSO Centre for Economic Research.
  6. Fisher, Walter H. & Heijdra, Ben J., 2007. "Keeping up with the Ageing Joneses," Economics Series 204, Institute for Advanced Studies.
  7. Kavuncu, Y. Okan & Knabb, Shawn D., 2005. "Stabilizing greenhouse gas emissions: Assessing the intergenerational costs and benefits of the Kyoto Protocol," Energy Economics, Elsevier, vol. 27(3), pages 369-386, May.
  8. Tetsuo Ono, 2007. "Environmental Tax Reform, Economic Growth, and Unemployment in an OLG Economy," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 63(1), pages 133-161, March.
  9. Ben Heijdra & Pim Heijnen, 2013. "Environmental Abatement and the Macroeconomy in the Presence of Ecological Thresholds," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 55(1), pages 47-70, May.

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