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Who should bear the administrative costs of an emissions tax?

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  • John Stranlund

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  • Carlos Chávez

Abstract

All environmental policies involve costs of implementation and management that are distinct from pollution sources’ abatement costs. In practice, regulators and sources usually share these administrative costs. We examine theoretically an optimal policy consisting of an emissions tax and the distribution of administrative costs between the government and regulated sources of pollution. Our focus is on the optimal distribution of administrative costs between polluters and the government and the optimal level of the emissions tax in relation to marginal pollution damage. We demonstrate how the policy variables affect aggregate equilibrium administrative costs and show that these effects are generally indeterminate, as is the effect of the distribution of administrative costs on aggregate emissions. Consequently, the optimal sharing of administrative costs and whether the optimal emissions tax is higher or lower than marginal damage depend on specific contexts. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • John Stranlund & Carlos Chávez, 2013. "Who should bear the administrative costs of an emissions tax?," Journal of Regulatory Economics, Springer, vol. 44(1), pages 53-79, August.
  • Handle: RePEc:kap:regeco:v:44:y:2013:i:1:p:53-79
    DOI: 10.1007/s11149-013-9216-9
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    References listed on IDEAS

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    Cited by:

    1. Zafer Kanik & Serkan Kucuksenel, 2013. "The Promise of Transferable Fishing Concessions on EU Fisheries," ERC Working Papers 1312, ERC - Economic Research Center, Middle East Technical University, revised Dec 2013.
    2. Kanik, Zafer & Kucuksenel, Serkan, 2014. "Transferable Fishing Concessions and EU Fisheries," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 183092, European Association of Agricultural Economists.
    3. repec:prg:jnlefa:v:2017:y:2017:i:4:id:198:p:19-30 is not listed on IDEAS

    More about this item

    Keywords

    Emission taxes; Pigouvian taxes; Administrative costs; Pollution control; L51; Q58;

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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