Second-best pollution taxes: An analytical framework and some new results
AbstractThis paper compares the second-best optimal tax on polluting consumption goods with the Pigovian tax, which would internalize marginal environmental damage at a second-best optimum. It is shown that the relationship between the optimal tax on polluting consumption and the Pigovian tax is determined by the substitutability between labour and polluting consumption or clean and polluting consumption, depending on whether a wage tax system or a commodity tax system is being considered. The key factor determining the relationship between the two taxes is gross substitutability between the two taxed goods. As long as there is gross substitutability, the optimal dirt tax exceeds the Pigovian tax. The opposite can occur if and only if the two goods are gross complements.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by University of Munich, Department of Economics in its series Munich Reprints in Economics with number 20299.
Date of creation: 1999
Date of revision:
Publication status: Published in Bulletin of Economic Research 1 51(1999): pp. 31-38
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Pitafi, Basharat A.K. & Roumasset, James A., 2002.
"Optimal Green Taxation with Both Emission and Commodity Taxes,"
2002 Annual meeting, July 28-31, Long Beach, CA
19693, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Basharat A.K. Pitafi & James A. Roumasset, 2002. "Optimal Green Taxation With Both Emission and Commodity Taxes," Working Papers 200208, University of Hawaii at Manoa, Department of Economics.
- A. Bovenberg, 1999. "Green Tax Reforms and the Double Dividend: an Updated Reader's Guide," International Tax and Public Finance, Springer, vol. 6(3), pages 421-443, August.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alexandra Frank).
If references are entirely missing, you can add them using this form.