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A Framework to Compare Environmental Policies

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  • Don Fullerton

Abstract

This paper builds a single model that can be used to show efficiency and distributional effects of eight different types of environmental policies (including taxes, subsidies, regulations, permits, and legal liability). All eight approaches can be designed to have the same efficiency effects, even while they have different distributional effects. For further evaluation of these policies, the paper discusses other criteria outside the simple model (including administrative efficiency, enforcement capabilities, and political feasibility). The paper ends with a discussion of likely trade-offs among these often-competing objectives of environmental policy.

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  • Don Fullerton, 2001. "A Framework to Compare Environmental Policies," NBER Working Papers 8420, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:8420
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    Cited by:

    1. Alberto Gago & Xavier Labandeira & Xiral López Otero, 2014. "A Panorama on Energy Taxes and Green Tax Reforms," Hacienda Pública Española / Review of Public Economics, IEF, vol. 208(1), pages 145-190, March.
    2. Andr, Francisco J. & Gonzlez, Paula & Porteiro, Nicols, 2009. "Strategic quality competition and the Porter Hypothesis," Journal of Environmental Economics and Management, Elsevier, vol. 57(2), pages 182-194, March.
    3. Don Fullerton, 2009. "Does Environmental Protection Hurt Low-Income Families?," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 10(1), pages 45-49, April.
    4. Vollebergh, Herman, 2013. "Environmental Taxes and Green Growth," Other publications TiSEM 9efd8e7a-397e-428f-95be-c, Tilburg University, School of Economics and Management.
    5. David Tobón Orozco & Carlos Andrés Vasco Correa, 2011. "Un modelo de equilibrio general con externalidades y capital natural," Libros del Grupo Microeconomía Aplicada, Universidad de Antioquia, Departamento de Economía, edition 1, number 01, June.
    6. Gilbert E. Metcalf & David Weisbach, 2012. "Linking Policies When Tastes Differ: Global Climate Policy in a Heterogeneous World," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 6(1), pages 110-129.
    7. Baris Ata & Deishin Lee & Mustafa H. Tongarlak, 2012. "Optimizing Organic Waste to Energy Operations," Manufacturing & Service Operations Management, INFORMS, vol. 14(2), pages 231-244, April.
    8. Nijiraini, Georgina & Thiam, Djiby, 2015. "Estimating transaction costs associated with water policy implementation in South Africa," 2015 Conference, August 9-14, 2015, Milan, Italy 212585, International Association of Agricultural Economists.
    9. Alberto Gago & Xavier Labandeira & José M. Labeaga & Xiral López Otero, 2021. "Transport Taxes and Decarbonization in Spain: Distributional Impacts and Compensation," Hacienda Pública Española / Review of Public Economics, IEF, vol. 238(3), pages 101-136, September.
    10. Phan, Thu-Ha Dang & Brouwer, Roy & Davidson, Marc David, 2017. "A Global Survey and Review of the Determinants of Transaction Costs of Forestry Carbon Projects," Ecological Economics, Elsevier, vol. 133(C), pages 1-10.
    11. Stef Proost & Denise Van Regemorter, 2004. "Climate Change Policy in European Countries and its effects on industry," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 9(4), pages 453-473, October.
    12. Don Fullerton & Andrew Leicester & Stephen Smith, 2008. "Environmental Taxes," NBER Working Papers 14197, National Bureau of Economic Research, Inc.
    13. Don Fullerton, 2009. "Does Environmental Protection Hurt Low-Income Families?," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 10(01), pages 45-49, April.
    14. Ossama Mikhail & J. Walter Milon & Richard Hofler, 2005. "Is Investment in Environmental Quality a Solution to Recessions? Studying the Welfare Effects of Green Animal Spirits," Others 0510010, University Library of Munich, Germany.
    15. Abdul Baki, Ghina & Marrouch, Walid, 2022. "Environmental taxation in the Bertrand differentiated duopoly: New insights," Resource and Energy Economics, Elsevier, vol. 70(C).
    16. Scott Farrow, 2011. "Incorporating Equity in Regulatory and Benefit‐Cost Analysis Using Risk‐Based Preferences," Risk Analysis, John Wiley & Sons, vol. 31(6), pages 902-907, June.
    17. Xin Deng & Lingzhi Zhang & Rong Xu & Miao Zeng & Qiang He & Dingde Xu & Yanbin Qi, 2022. "Do Cooperatives Affect Groundwater Protection? Evidence from Rural China," Agriculture, MDPI, vol. 12(7), pages 1-14, July.
    18. Baomin Dong & Jiong Gong & Xin Zhao, 2012. "FDI and environmental regulation: pollution haven or a race to the top?," Journal of Regulatory Economics, Springer, vol. 41(2), pages 216-237, April.
    19. Xu, Wenli & Xu, Kun & Lu, Hongyou, 2016. "Environmental Policy and China’s Macroeconomic Dynamics Under Uncertainty---Based on The NK Model with Distortionary Taxation," MPRA Paper 71314, University Library of Munich, Germany.
    20. Cristina Ciocirlan & Bruce Yandle, 2003. "The Political Economy of Green Taxation in OECD Countries," European Journal of Law and Economics, Springer, vol. 15(3), pages 203-218, May.
    21. Don Fullerton, 2008. "Distributional Effects of Environmental and Energy Policy: An Introduction," NBER Working Papers 14241, National Bureau of Economic Research, Inc.
    22. McCann, Laura & Colby, Bonnie & Easter, K. William & Kasterine, Alexander & Kuperan, K.V., 2005. "Transaction cost measurement for evaluating environmental policies," Ecological Economics, Elsevier, vol. 52(4), pages 527-542, March.
    23. Cristina E. Ciocirlan, 2008. "Analysing preferences towards economic incentives in combating climate change: a comparative analysis of US states," Climate Policy, Taylor & Francis Journals, vol. 8(6), pages 548-568, November.
    24. Robert D. Mohr & Shrawantee Saha, 2008. "Distribution of Environmental Costs and Benefits, Additional Distortions, and the Porter Hypothesis," Land Economics, University of Wisconsin Press, vol. 84(4), pages 689-700.
    25. Mettepenningen, Evy & Beckmann, Volker & Eggers, Jorg, 2008. "Public transaction cost of agri-environmental schemes and its determinants - Analysing stakeholders’ involvement and perceptions," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44321, European Association of Agricultural Economists.

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    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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