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Technological standards, environmental taxation and pollution monitoring

Author

Listed:
  • P. Bontems
  • J.-M. Bourgeon

Abstract

We consider the combine use of environmental taxation and technological standards of abatement. While it is not necessary to regulate technology adoption under complete information, we show that the environmental agency has to impose a technological standard when monitoring emissions is costly and when pollution benefits are the firm's private information. Although this policy constrains firms with low pollution benefits to over-invest compared to laissez-faire, it leads to a cut in informational rents and a decrease in the protifs firms would extract from evading taxation. Incentives for tax evasion are therefore reduced and tax collection is increased. ...French Abstract : Les auteurs considèrent, dans cet article, l'usage combiné de la taxation environnementale et de la norme de technologie de dépollution. Alors qu'il n'est pas nécessaire de réguler l'adoption de technologie en information complète, ils montrent que l'agence de l'environnement doit imposer une norme de technologie de dépollution lorsque la mesure des émissions est coûteuse et lorsque le coût d'opportunité de la pollution est une information privée des pollueurs. Bien que cette politique induit un surinvestissement des firmes ayant un faible bénéfice lié à la pollution émise, comparativement à une politique de laissez-faire, cela conduit à diminuer le coût d'agence et le profit que les firmes peuvent potentiellement retirer d'une fraude fiscale. Les incitations à la fraude sont ainsi réduites et le montant des taxes collectées est accru.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • P. Bontems & J.-M. Bourgeon, 2002. "Technological standards, environmental taxation and pollution monitoring," THEMA Working Papers 2002-10, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  • Handle: RePEc:ema:worpap:2002-10
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    File URL: http://www.u-cergy.fr/IMG/documents//2002-10Bourgeon.pdf
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm

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