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Pigouvian Tax, Abatement Policies and Uncertainty on the Environment

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  • M. Menegatti

    ()

  • D. Baiardi

    ()

Abstract

The paper examines the effects of environmental uncertainty on Pigouvian tax and abatement policy used, either separately or contemporaneously, to counteract pollution. We discuss uncertainty in three aspects: environmental quality, pollution effect and the impact of abatement. For each case we determine the conditions ensuring that uncertainty increases the size of public intervention and provide an economic interpretation and some parallelisms with other risk problems. The last part of the paper generalizes some of our results to the case of N-th order risk changes.

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File URL: http://swrwebeco.econ.unipr.it/RePEc/pdf/I_2010-04.pdf
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Bibliographic Info

Paper provided by Department of Economics, Parma University (Italy) in its series Economics Department Working Papers with number 2010-EP04.

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Length: 19 pages
Date of creation: 2010
Date of revision:
Handle: RePEc:par:dipeco:2010-ep04

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Keywords: Pigouvian tax; Abatement policies; Environment; Uncertainty; Bivariate utility;

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References

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Cited by:
  1. Jianli Wang & Pu Gong, 2013. "Labor supply with stochastic wage rate and non-labor income uncertainty," Journal of Economics, Springer, vol. 109(1), pages 41-55, May.
  2. Elyès Jouini & Clotilde Napp & Diego Nocetti, 2013. "Economic consequences of Nth-degree risk increases and Nth-degree risk attitudes," Journal of Risk and Uncertainty, Springer, vol. 47(2), pages 199-224, October.
  3. Donatella Baiardi & Matteo Manera & Mario Menegatti, 2014. "The Effects of Environmental Risk on Consumption: an Empirical Analysis on the Mediterranean Countries," Working Papers 2014.43, Fondazione Eni Enrico Mattei.
  4. Donatella Baiardi & Matteo Manera & Mario Menegatti, 2011. "Consumption and Precautionary Saving: An Empirical Analysis under Both Financial and Environmental Risks," Working Papers 2011.62, Fondazione Eni Enrico Mattei.
  5. Menegatti, Mario, 2014. "New results on the relationship among risk aversion, prudence and temperance," European Journal of Operational Research, Elsevier, vol. 232(3), pages 613-617.
  6. Donatella Baiardi & Matteo Manera & Mario Menegatti, 2014. "The Effects of Environmental Risk on Consumption: an Empirical Analysis on the Mediterranean Countries," Working Papers 271, University of Milano-Bicocca, Department of Economics, revised Apr 2014.

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