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International Cooperation over Green Taxes: On the Impossibility of Achieving a Probability-One Gain


  • Aronsson, Thomas

    () (Department of Economics, Umeå University)

  • Backlund, Kenneth

    () (Department of Economics, Umeå University)

  • Löfgren, Karl-Gustaf

    () (Department of Economics, Umeå University)


This paper concerns international coordination of environmental taxation. The main purpose is to study the global welfare effects that will arise, if there is an agreement between countries to slightly increase their emission taxes. We show that even if each individual country has chosen its prereform emission tax to be 'too low' in comparison with the marginal cost of the environmental damage caused by that particular country's emissions, implementation of the agreement will not necessarily increase the welfare level.

Suggested Citation

  • Aronsson, Thomas & Backlund, Kenneth & Löfgren, Karl-Gustaf, 2000. "International Cooperation over Green Taxes: On the Impossibility of Achieving a Probability-One Gain," Umeå Economic Studies 522, Umeå University, Department of Economics.
  • Handle: RePEc:hhs:umnees:0522

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    References listed on IDEAS

    1. Fiona M. Scott Morton, 1999. "Entry Decisions in the Generic Pharmaceutical Industry," Yale School of Management Working Papers ysm119, Yale School of Management.
    2. Hartley, K & Lavers, R J & Maynard, A K, 1986. "Regulation and Development Times in the U.K. Pharmaceutical Industry," Scottish Journal of Political Economy, Scottish Economic Society, vol. 33(4), pages 355-369, November.
    3. Fiona Scott Morton, 1997. "The Objectives of the FDA's Office of Generic Drugs," NBER Working Papers 6143, National Bureau of Economic Research, Inc.
    4. Robert McDonald & Daniel Siegel, 1986. "The Value of Waiting to Invest," The Quarterly Journal of Economics, Oxford University Press, vol. 101(4), pages 707-727.
    5. Newey, Whitney & West, Kenneth, 2014. "A simple, positive semi-definite, heteroscedasticity and autocorrelation consistent covariance matrix," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 33(1), pages 125-132.
    6. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, Oxford University Press, vol. 87(3), pages 355-374.
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    Cited by:

    1. Aronsson, Thomas & Blomquist, Soren, 2003. "Optimal taxation, global externalities and labor mobility," Journal of Public Economics, Elsevier, vol. 87(12), pages 2749-2764, December.

    More about this item


    Environmental taxation; global external effects;

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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