IDEAS home Printed from https://ideas.repec.org/p/wil/wileco/2001-13.html
   My bibliography  Save this paper

Setting Environmental Taxes in a Second-best World

Author

Listed:

Abstract

This paper compares the optimal environmental tax with two alternative definitions of marginal environmental damages. One definition reflects the social marginal rate of substitution between income and the environment; the other reflects the sum of households' marginal willingness to pay. The analysis finds that the definition based on the social marginal rate of substitution provides a consistent benchmark for setting environmental taxes that is compatible with both the Pigouvian principle and the double dividend hypothesis. The definition based on the sum of households' marginal willingness to pay, however, is found to be incompatible with optimal taxation and an unreliable benchmark for making welfare inferences.

Suggested Citation

  • William K. Jaeger, 2001. "Setting Environmental Taxes in a Second-best World," Department of Economics Working Papers 2001-13, Department of Economics, Williams College.
  • Handle: RePEc:wil:wileco:2001-13
    Note: full text not available
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item

    Keywords

    environmental tax; second best; double dividend; optimal taxation;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

    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:wil:wileco:2001-13. 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: (Stephen Sheppard). General contact details of provider: http://edirc.repec.org/data/edwilus.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.

    We have no references for this item. You can help adding them by using 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.