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A Framework to Compare Environmental Policies

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  • Don Fullerton

Abstract

This paper builds a single model that can be used to show efficiency and distributional effects of eight different types of environmental policies (including taxes, subsidies, regulations, permits, and legal liability). All eight approaches can be designed to have the same efficiency effects, even while they have different distributional effects. For further evaluation of these policies, the paper discusses other criteria outside the simple model (including administrative efficiency, enforcement capabilities, and political feasibility). The paper ends with a discussion of likely trade-offs among these often-competing objectives of environmental policy.

Suggested Citation

  • Don Fullerton, 2001. "A Framework to Compare Environmental Policies," NBER Working Papers 8420, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:8420
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    References listed on IDEAS

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    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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