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Environmental Tax Reform: Efficiency and Political Feasibility

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  • Stefan Felder
  • Reto Schleiniger

Abstract

Command-and-control measures, despite their inefficiencies, are still the standard in environmental policy. This might be due to the fact that command-and-control instruments prevent monetary redistribution between sectors and households and leave property rights on remaining pollution with the emittents. The present paper interprets the no-redistribution policy as a political constraint and investigates on more efficient alternatives to command-and- control, using a computable general equilibrium model for Switzerland. Simulation results render schemes that refund environmental tax revenues by a sector-by-sector-subsidy on labor or output as welfare enhancing.

Suggested Citation

  • Stefan Felder & Reto Schleiniger, "undated". "Environmental Tax Reform: Efficiency and Political Feasibility," IEW - Working Papers 013, Institute for Empirical Research in Economics - University of Zurich.
    • Handle: RePEc:zur:iewwpx:013
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    References listed on IDEAS

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    More about this item

    Keywords

    Environmental tax reform; price-standard-approach; public choice; computable general equilibrium model;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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