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Atmospheric Externalities and Environmental Taxation

Author

Listed:
  • Sandmo, Agnar

    (Dept. of Economics, Norwegian School of Economics and Business Administration)

Abstract

The paper reviews the theory of environmental taxation under first best and second best conditions. It argues that negative environmental externalities lead to reductions of the provision of public goods, while investment in abatement increases the supply of public goods. Together with optimal tax rules, the paper therefore also derives conditions for the optimal use of resources on abatement. After brief discussions of the dimensions of time and uncertainty, tax reform and the double dividend, and taxes versus quotas, the optimal tax model is applied to the problem of global warming with a discussion of the particular incentive problems that arise in designing and implementing global climate policy.

Suggested Citation

  • Sandmo, Agnar, 2010. "Atmospheric Externalities and Environmental Taxation," Discussion Paper Series in Economics 23/2010, Norwegian School of Economics, Department of Economics.
    • Handle: RePEc:hhs:nhheco:2010_023
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    Citations

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    Cited by:

    1. is not listed on IDEAS
    2. Stéphane Gauthier & Fanny Henriet, 2018. "A Fuel Tax Decomposition When Local Pollution Matters," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01826330, HAL.
    3. Stéphane Gauthier & Fanny Henriet, 2018. "A Fuel Tax Decomposition When Local Pollution Matters," Working Papers halshs-01826330, HAL.
    4. Andreas Löschel & Dirk Rübbelke, 2014. "On the Voluntary Provision of International Public Goods," Economica, London School of Economics and Political Science, vol. 81(322), pages 195-204, April.
    5. Kovalev, Andrey V., 2016. "Misuse of thermodynamic entropy in economics," Energy, Elsevier, vol. 100(C), pages 129-136.
    6. Stéphane Gauthier & Fanny Henriet, 2023. "Targeting Taxes on Local Externalities," Annals of Economics and Statistics, GENES, issue 151, pages 1-36.
    7. Abdul Baki, Ghina & Benchekroun, Hassan & Marrouch, Walid, 2024. "Emissions taxes under double-sided environmental externalities," Economics Letters, Elsevier, vol. 242(C).
    8. Chen, Zhan-Ming & Liu, Yu & Qin, Ping & Zhang, Bo & Lester, Leo & Chen, Guanghua & Guo, Yumei & Zheng, Xinye, 2015. "Environmental externality of coal use in China: Welfare effect and tax regulation," Applied Energy, Elsevier, vol. 156(C), pages 16-31.
    9. Alberto Gago & Xavier Labandeira & Xiral López Otero, 2014. "A Panorama on Energy Taxes and Green Tax Reforms," Hacienda Pública Española / Review of Public Economics, IEF, vol. 208(1), pages 145-190, March.
    10. Arbex, Marcelo & Behringer, Stefan & Trudeau, Christian, 2017. "Optimal tax policy under heterogeneous environmental preferences," Economics Letters, Elsevier, vol. 157(C), pages 79-82.
    11. Tol, Richard S.J., 2013. "Targets for global climate policy: An overview," Journal of Economic Dynamics and Control, Elsevier, vol. 37(5), pages 911-928.

    More about this item

    Keywords

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    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods

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