IDEAS home Printed from https://ideas.repec.org/p/kei/dpaper/2012-045.html
   My bibliography  Save this paper

Environmental Externality on Production in an OLG Economy

Author

Listed:
  • Hiroshi Danbara

    (Graduate School of Economics, Keio University)

Abstract

In this paper, we introduce the environmental externality into the Diamond (1965) model. The environmental externality affects on the production negatively. We define a socially optimal allocation and a competitive equilibrium, and obtain the first-order necessary conditions. In competitive equilibrium, both consumers and firms have no incentives to maintain the environment, hence competitive equilibrium allocation can not be socially optimal. Therefore we propose a tax scheme. Our model requires two types of taxes in order to achieve a social optimum.

Suggested Citation

  • Hiroshi Danbara, 2013. "Environmental Externality on Production in an OLG Economy," Keio/Kyoto Joint Global COE Discussion Paper Series 2012-045, Keio/Kyoto Joint Global COE Program.
  • Handle: RePEc:kei:dpaper:2012-045
    as

    Download full text from publisher

    File URL: http://ies.keio.ac.jp/old_project/old/gcoe-econbus/pdf/dp/DP2012-045.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. John, A & Pecchenino, R, 1994. "An Overlapping Generations Model of Growth and the Environment," Economic Journal, Royal Economic Society, vol. 104(427), pages 1393-1410, November.
    2. John, A. & Pecchenino, R. & Schimmelpfennig, D. & Schreft, S., 1995. "Short-lived agents and the long-lived environment," Journal of Public Economics, Elsevier, vol. 58(1), pages 127-141, September.
    3. Jouvet, Pierre-Andre & Michel, Philippe & Vidal, Jean-Pierre, 2000. " Intergenerational Altruism and the Environment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(1), pages 135-150, March.
    4. Michel, Philippe & Thibault, Emmanuel & Vidal, Jean-Pierre, 2006. "Intergenerational altruism and neoclassical growth models," Handbook on the Economics of Giving, Reciprocity and Altruism, Elsevier.
    5. Batina, Raymond G. & Ihori, Toshihiro, 2000. "Consumption Tax Policy and the Taxation of Capital Income," OUP Catalogue, Oxford University Press, number 9780198297901.
    6. Prieur, Fabien & Jean-Marie, Alain & Tidball, Mabel, 2013. "Growth And Irreversible Pollution: Are Emission Permits A Means Of Avoiding Environmental And Poverty Traps?," Macroeconomic Dynamics, Cambridge University Press, vol. 17(02), pages 261-293, March.
    7. Jouvet, Pierre-Andre & Michel, Philippe & Rotillon, Gilles, 2005. "Optimal growth with pollution: how to use pollution permits?," Journal of Economic Dynamics and Control, Elsevier, vol. 29(9), pages 1597-1609, September.
    8. Ono, Tetsuo, 1996. "Optimal tax schemes and the environmental externality," Economics Letters, Elsevier, vol. 53(3), pages 283-289, December.
    Full references (including those not matched with items on IDEAS)

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kei:dpaper:2012-045. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Global COE Program Office). General contact details of provider: http://edirc.repec.org/data/iekeijp.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.