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Kantians Defy the Economists' Mantra of Uniform Pigovian Emissions Taxes

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  • Thomas Eichner
  • Rüdiger Pethig

Abstract

This paper analyzes the efficient emissions taxation in economies with individuals who are morally motivated to reduce their emissions footprint. They are heterogenous with respect to their morality and their consumption preferences. We distinguish between the concepts of moral and conventional utilitarian (= material) welfare. The materially efficient tax rates turn out to be consumer-type specific; they are smaller than the Pigovian tax rate; and the smaller, the higher the individuals’ propensity to act morally. Finally, we briefly characterize the second-best uniform emissions tax.

Suggested Citation

  • Thomas Eichner & Rüdiger Pethig, 2020. "Kantians Defy the Economists' Mantra of Uniform Pigovian Emissions Taxes," CESifo Working Paper Series 8749, CESifo.
    • Handle: RePEc:ces:ceswps:_8749
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    Cited by:

    1. Ambec, Stefan & De Donder, Philippe, 2022. "Environmental policy with green consumerism," Journal of Environmental Economics and Management, Elsevier, vol. 111(C).
    2. Esteban Muñoz Sobrado, 2022. "Taxing Moral Agents," CESifo Working Paper Series 9867, CESifo.
    3. Thomas Eichner & Marco Runkel, 2024. "Homo Oeconomicus as the Homo Moralis’ Party Pooper: Heterogeneous Morality in Public Good Games," CESifo Working Paper Series 11231, CESifo.
    4. Ellalee, Haider & Alali, Walid Y., 2022. "Social welfare Promotion, Carbon Emission and Tax," EconStor Preprints 274657, ZBW - Leibniz Information Centre for Economics.
    5. Ellalee, Haider & Alali, Walid Y., 2022. "Social welfare Promotion, Carbon Emission and Tax," MPRA Paper 117508, University Library of Munich, Germany, revised 20 Sep 2022.

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    More about this item

    Keywords

    Pigovian tax; material; moral; Kantian; consumer-type tax;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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