Environmental policy in dynamic models: The impact of the elasticity of substitution if consumers pollute
AbstractThis paper discusses first results of a comparative study of different environmental policy instruments. In a model with pollution as a side effect of consumption different environmental policies are studied. In simulations we observe the dynamic behavior of models with utility functions of the Leontief, CES, and Cobb-Douglas type. Environmental policy is modeled as a consumption tax. Tax revenues are used to pay a subsidy for environment-friendly activities, are reimbursed as lump-sum payments or vanish. Furthermore we investigate the implications of errors in the choice of instruments.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 8228.
Date of creation: 23 Nov 2005
Date of revision:
Environmental policy instruments; Dynamic Model; Elasticity of substitution;
Find related papers by JEL classification:
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
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