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On A Consumer‐Based Emission Tax Policy

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  • TSUYOSHI TOSHIMITSU

Abstract

Based on a model of environmental quality differentiated products, we explore how an emission tax charged on consumers who choose an environment‐unfriendly good, i.e. a consumer‐based emission tax policy, affects the unit emission level of the product, the environment, and consumer and producer surplus. Then, we analyse the conditions for an optimal consumer‐based emission tax rate to exist and the properties of the optimal tax rate. We address these issues in the case of a partial coverage market with a Bertrand duopoly. Furthermore, we discuss some of the assumptions of the model.

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  • Tsuyoshi Toshimitsu, 2010. "On A Consumer‐Based Emission Tax Policy," Manchester School, University of Manchester, vol. 78(6), pages 626-646, December.
    • Handle: RePEc:bla:manchs:v:78:y:2010:i:6:p:626-646
    DOI: 10.1111/j.1467-9957.2009.02150.x
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    1. Cremer, Helmuth & Thisse, Jacques-Francois, 1999. "On the taxation of polluting products in a differentiated industry," European Economic Review, Elsevier, vol. 43(3), pages 575-594, March.
    2. Helmuth Cremer & Firouz Gahvari & Norbert Ladoux, 2002. "Externalities and Optimal Taxation," Chapters, in: Lawrence H. Goulder (ed.), Environmental Policy Making in Economies with Prior Tax Distortions, chapter 14, pages 210-232, Edward Elgar Publishing.
    3. Cremer, Helmuth & Gahvari, Firouz & Ladoux, Norbert, 2003. "Environmental taxes with heterogeneous consumers: an application to energy consumption in France," Journal of Public Economics, Elsevier, vol. 87(12), pages 2791-2815, December.
    4. Baumol,William J. & Oates,Wallace E., 1988. "The Theory of Environmental Policy," Cambridge Books, Cambridge University Press, number 9780521322249, December.
    5. C. Lombardini-Riipinen, 2005. "Optimal Tax Policy under Environmental Quality Competition," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 32(3), pages 317-336, November.
    6. Till Requate, 1993. "Pollution control in a Cournot duopoly via taxes or permits," Journal of Economics, Springer, vol. 58(3), pages 255-291, October.
    7. Stephen Smith, 1992. "Taxation and the environment: a survey," Fiscal Studies, Institute for Fiscal Studies, vol. 13(4), pages 21-57, January.
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    Cited by:

    1. Rupayan Pal, 2012. "Delegation And Emission Tax In A Differentiated Oligopoly," Manchester School, University of Manchester, vol. 80(6), pages 650-670, December.
    2. Bian, Junsong & Zhang, Guoqing & Zhou, Guanghui, 2020. "Manufacturer vs. Consumer Subsidy with Green Technology Investment and Environmental Concern," European Journal of Operational Research, Elsevier, vol. 287(3), pages 832-843.

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