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Environmental policy, public goods and the marginal cost of public funds

Author

Listed:
  • van der Ploeg, F.
  • Bovenberg, A.L.

    (Tilburg University, Center For Economic Research)

Abstract

If private goods are perfect substitutes for public goods and environmental quality, greener preferences reduce employment, raise abatement, and improve environmental quality. If the elasticity of substitution between private goods and leisure exceeds one, the tax rate increases, thereby reducing private consumption. However, if labor supply bends backwards, private utility rises while the tax rate and public consumption fall. With imperfect substitution between private and public consumption, greener policies boost labor supply if the substitution elasticity between private and public consumption and the elasticity of the effectiveness of public abatement are small and the labor supply curve bends backwards. Copyright 1994 by Royal Economic Society.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • van der Ploeg, F. & Bovenberg, A.L., 1993. "Environmental policy, public goods and the marginal cost of public funds," Discussion Paper 1993-45, Tilburg University, Center for Economic Research.
    • Handle: RePEc:tiu:tiucen:e83c2a03-9fb8-47ef-95e7-804d64be1531
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    Cited by:

    1. Giancarlo Giudici & Massimiliano Guerini & Cristina Rossi-Lamastra, 2019. "The creation of cleantech startups at the local level: the role of knowledge availability and environmental awareness," Small Business Economics, Springer, vol. 52(4), pages 815-830, April.
    2. Mireille Chiroleu-Assouline, 2001. "Le double dividende. Les approches théoriques," Revue Française d'Économie, Programme National Persée, vol. 16(2), pages 119-147.
    3. Anneliese Krautkraemer & Sonia Schwartz, 2021. "Payment for Environmental Services and pollution tax under imperfect competition," Post-Print hal-03194799, HAL.
    4. Juan González Alegre, 2012. "An evaluation of EU regional policy. Do structural actions crowd out public spending?," Public Choice, Springer, vol. 151(1), pages 1-21, April.
    5. Ronnie Schöb, 2003. "The Double Dividend Hypothesis of Environmental Taxes: A Survey," CESifo Working Paper Series 946, CESifo.
    6. Schöb, Ronnie, 2009. "Climate policy: choosing the right instrument to reap an additional employment dividend," Discussion Papers 2009/10, Free University Berlin, School of Business & Economics.
    7. Chiroleu-Assouline, Mireille & Fodha, Mouez, 2006. "Double dividend hypothesis, golden rule and welfare distribution," Journal of Environmental Economics and Management, Elsevier, vol. 51(3), pages 323-335, May.
    8. Mireille Chiroleu-Assouline & Mouez Fodha, 2011. "Verdissement de la fiscalité. À qui profite le double dividende ?," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(1), pages 409-431.
    9. repec:dau:papers:123456789/5402 is not listed on IDEAS
    10. Bayindir-Upmann, Thorsten, 1998. "Interjurisdictional competition in emission taxes under imperfect competition of local firms," European Journal of Political Economy, Elsevier, vol. 14(2), pages 345-368, May.
    11. William Jaeger, 2011. "The Welfare Effects of Environmental Taxation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 49(1), pages 101-119, May.
    12. Andersen, Torben M. & Rasmussen, Bo Sandemann & Sorensen, Jan Rose, 1996. "Optimal fiscal policy in open economies with labour market distortions," Journal of Public Economics, Elsevier, vol. 63(1), pages 103-117, December.
    13. F. Barigozzi & B. Villeneuve, 2001. "Influencing the Misinformed Misbehaver: An Analysis of Public Policy towards Uncertainty and External Effects," Working Papers 404, Dipartimento Scienze Economiche, Universita' di Bologna.

    More about this item

    Keywords

    Environment; Taxation; Public Goods; Consumption;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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