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Nonpoint source pollution: An experimental investigation of the Average Pigouvian Tax

Author

Listed:
  • Hamet SARR

    (ENGEES, UMR GESTE, université Strasbourg)

  • Mohamed Ali BCHIR

    (ENGEES, UMR GESTE, université Strasbourg)

  • François COCHARD

    (CRESE EA3190 Univ. Bourgogne Franche-Comté)

  • Anne ROZAN

    (ENGEES, UMR GESTE, université Strasbourg)

Abstract

The Average Pigouvian Tax (APT) was proposed by Suter et al. (2008) to reduce the financial burden of the standard ambient tax. This instrument consists in a standard ambient tax divided by the number of firms, which requires polluters to cooperate in order to achieve the social optimum. To enable polluters to cooperate, communication is allowed. We introduce different types of communication: cheap talk, exogenous costly communication (communication is imposed), and endogenous costly communication (conducted on a voluntary basis after a vote). Our experiment confirms that the instrument induces polluters to reduce their emissions under cheap talk. However, we find that group emissions are less reduced when communication is costly. This result still holds even when we endogenize communication by introducing a voting phase.

Suggested Citation

  • Hamet SARR & Mohamed Ali BCHIR & François COCHARD & Anne ROZAN, 2016. "Nonpoint source pollution: An experimental investigation of the Average Pigouvian Tax," Working Papers 2016-05, CRESE.
    • Handle: RePEc:crb:wpaper:2016-05
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    References listed on IDEAS

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    1. Maïmouna Yokessa & Stéphan Marette, 2019. "A Tax Coming from the IPCC Carbon Prices Cannot Change Consumption: Evidence from an Experiment," Sustainability, MDPI, vol. 11(18), pages 1-20, September.

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    More about this item

    Keywords

    nonpoint source pollution; ambient tax; social dilemma; cooperation; cheap talk; costly communication; vote.;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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