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Green Throughput Taxation: Environmental and Economic Consequences

  • Annegrete Bruvoll


  • Karin Ibenholt


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

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Article provided by Springer & European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 12 (1998)
Issue (Month): 4 (December)
Pages: 387-401

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Handle: RePEc:kap:enreec:v:12:y:1998:i:4:p:387-401
DOI: 10.1023/A:1008234017015
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  1. Maurice Obstfeld, 1981. "Aggregate Spending and the Terms of Trade: Is There a Laursen-Metzler Effect?," NBER Working Papers 0686, National Bureau of Economic Research, Inc.
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  5. Annegrete Bruvoll & Karin Ibenholt, 1996. "Future Waste Generation - Forecasts Based on a Macroeconomic Model," Discussion Papers 175, Statistics Norway, Research Department.
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  9. Bruvoll, Annegrete & Glomsrod, Solveig & Vennemo, Haakon, 1999. "Environmental drag: evidence from Norway," Ecological Economics, Elsevier, vol. 30(2), pages 235-249, August.
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