Tax distortions and global climate policy
We consider the efficiency implications of policies to reduce global carbon emissions in a world with pre-existing tax distortions. We first note that the weak double-dividend, the proposition that the welfare improvement from a tax reform where environmental taxes are used to lower distorting taxes must be greater than the welfare improvement from a reform where the environmental taxes are returned in a lump sum fashion, need not hold in a world with multiple distortions. We then present a large-scale computable general equilibrium model of the world economy with distortionary taxation. We use this model to evaluate a number of policies to reduce carbon emissions. We find that the weak double dividend is not obtained in a number of European countries. Results also demonstrate the point that the interplay between carbon policies and pre-existing taxes can differ markedly across countries. Thus one must be cautious in extrapolating the results from a country specific analysis to other countries.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Angus Deaton, 1979. "The Distance Function in Consumer Behaviour with Applications to Index Numbers and Optimal Taxation," Review of Economic Studies, Oxford University Press, vol. 46(3), pages 391-405.
- Enrique G. Mendoza & Assaf Razin & Linda L. Tesar, 1994.
"Effective Tax Rates in Macroeconomics: Cross-Country Estimates of Tax Rates on Factor Incomes and Consumption,"
NBER Working Papers
4864, National Bureau of Economic Research, Inc.
- Mendoza, Enrique G. & Razin, Assaf & Tesar, Linda L., 1994. "Effective tax rates in macroeconomics: Cross-country estimates of tax rates on factor incomes and consumption," Journal of Monetary Economics, Elsevier, vol. 34(3), pages 297-323, December.
- Fullerton, Don & Metcalf, Gilbert E., 2001.
"Environmental controls, scarcity rents, and pre-existing distortions,"
Journal of Public Economics,
Elsevier, vol. 80(2), pages 249-267, May.
- Don Fullerton & Gilbert Metcalf, 1997. "Environmental Controls, Scarcity Rents, and Pre-Existing Distortions," NBER Working Papers 6091, National Bureau of Economic Research, Inc.
- Don Fullerton & Gilbert E. Metcalf, 1997. "Environmental Controls, Scarcity Rents, and Pre-Existing Distortions," Discussion Papers Series, Department of Economics, Tufts University 9703, Department of Economics, Tufts University.
- Babiker, Mustafa & Reilly, John & Ellerman, Denny, 2000. "Japanese Nuclear Power and the Kyoto Agreement," Journal of the Japanese and International Economies, Elsevier, vol. 14(3), pages 169-188, September.
- Lawrence Goulder, 1995. "Environmental taxation and the double dividend: A reader's guide," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 2(2), pages 157-183, August.
- Joines, Douglas H, 1981. "Estimates of Effective Marginal Tax Rates on Factor Incomes," The Journal of Business, University of Chicago Press, vol. 54(2), pages 191-226, April.
- Razin, Assaf & Sadka, Efraim, 1993. "The Economy of Modern Israel," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226705897.
- A. Denny Ellerman & Ian Sue Wing, 2000. "Supplementarity: An Invitation to Monopsony?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 29-59.
- Boyd, Roy & Ibarraran, Maria E., 2002. "Costs of compliance with the Kyoto Protocol: a developing country perspective," Energy Economics, Elsevier, vol. 24(1), pages 21-39, January.
- Terry Barker, 1999. "Achieving a 10% Cut in Europe's Carbon Dioxide Emissions using Additional Excise Duties: Coordinated, Uncoordinated and Unilateral Action using the Econometric Model E3ME," Economic Systems Research, Taylor & Francis Journals, vol. 11(4), pages 401-422.
- Seater, John J., 1985. "On the construction of marginal federal personal and social security tax rates in the U.S," Journal of Monetary Economics, Elsevier, vol. 15(1), pages 121-135, January.
- Mustafa H. Babiker & Gilbert E. Metcalf & John Reilly, 2002.
"Tax Distortions and Global Climate Policy,"
Discussion Papers Series, Department of Economics, Tufts University
0211, Department of Economics, Tufts University.
- Barro, Robert J. & Sahasakul, Chaipat, 1986.
"Average Marginal Tax Rates from Social Security and the Individual Income Tax,"
3451298, Harvard University Department of Economics.
- Barro, Robert J & Sahasakul, Chaipat, 1986. "Average Marginal Tax Rates from Social Security and the Individual Income Tax," The Journal of Business, University of Chicago Press, vol. 59(4), pages 555-566, October.
- Robert J. Barro & Chaipat Sahasakul, 1983. "Average Marginal Tax Rates from Social Security and the Individual Income Tax," NBER Working Papers 1214, National Bureau of Economic Research, Inc.
- Goulder Lawrence H., 1995. "Effects of Carbon Taxes in an Economy with Prior Tax Distortions: An Intertemporal General Equilibrium Analysis," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages 271-297, November.
- Babiker, Mustafa & Reilly, John M. & Jacoby, Henry D., 2000. "The Kyoto Protocol and developing countries," Energy Policy, Elsevier, vol. 28(8), pages 525-536, July.
- A. Bovenberg, 1999. "Green Tax Reforms and the Double Dividend: an Updated Reader's Guide," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 6(3), pages 421-443, August.
- Boyd Roy & Krutilla Kerry & Viscusi W. Kip, 1995. "Energy Taxation as a Policy Instrument to Reduce CO2 Emissions: A Net Benefit Analysis," Journal of Environmental Economics and Management, Elsevier, vol. 29(1), pages 1-24, July.
- Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685, November.
- Parry Ian W. H., 1995. "Pollution Taxes and Revenue Recycling," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages S64-S77, November.
When requesting a correction, please mention this item's handle: RePEc:eee:jeeman:v:46:y:2003:i:2:p:269-287. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.