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Green Throughput Taxation: Environmental and Economic Consequences

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  • Annegrete Bruvoll
  • Karin Ibenholt

Abstract

According to optimal taxation theory, raw materials should be taxed to capture the embedded scarcity rent in their value. To reduce both natural resource use and the corresponding emissions, or the throughput in the economic system, the best policy may be a tax on material inputs. As a first approach to throughput taxation, this paper considers a tax on intermediates in the framework of a dynamic computable general equilibrium model with environmental feedbacks. To balance the budget, payroll taxes are reduced. As a result, welfare indicators as material consumption and leisure time consumption are reduced, while on the other hand all the environmental indicators improve. Copyright Kluwer Academic Publishers 1998

Suggested Citation

  • Annegrete Bruvoll & Karin Ibenholt, 1998. "Green Throughput Taxation: Environmental and Economic Consequences," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 12(4), pages 387-401, December.
    • Handle: RePEc:kap:enreec:v:12:y:1998:i:4:p:387-401
    DOI: 10.1023/A:1008234017015
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    References listed on IDEAS

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    2. Deng, Xiangzheng & Zhao, Yonghong & Wu, Feng & Lin, Yingzhi & Lu, Qi & Dai, Jing, 2011. "Analysis of the trade-off between economic growth and the reduction of nitrogen and phosphorus emissions in the Poyang Lake Watershed, China," Ecological Modelling, Elsevier, vol. 222(2), pages 330-336.
    3. Skelton, Alexandra C.H. & Allwood, Julian M., 2013. "The incentives for supply chain collaboration to improve material efficiency in the use of steel: An analysis using input output techniques," Ecological Economics, Elsevier, vol. 89(C), pages 33-42.

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