2019
DOI: 10.1016/j.euroecorev.2019.03.006
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Environmental tax reform and income distribution with imperfect heterogeneous labour markets

Abstract: This paper investigates the distributional and efficiency consequences of an environmental tax reform, when the revenue from the green tax is recycled by varying labor tax rates. We build a general equilibrium model with imperfect heterogeneous labor markets, pollution consumption externalities, and non-homothetic preferences (Stone-Geary utility). We show that in the case where the reform appears to be regressive, the gains from the double dividend can be made Pareto improving by using a redistributive non-li… Show more

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Cited by 75 publications
(45 citation statements)
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“… 1 The conditions of the existence of a double dividend from the implementation of a carbon tax has been widely discussed in the literature (e.g. Aubert and Chiroleau-Assouline 2019 ; Hasfstead and Williams 2018 ). …”
mentioning
confidence: 99%
“… 1 The conditions of the existence of a double dividend from the implementation of a carbon tax has been widely discussed in the literature (e.g. Aubert and Chiroleau-Assouline 2019 ; Hasfstead and Williams 2018 ). …”
mentioning
confidence: 99%
“…In some countries (France, UK, Belgium), it depends on the method of disposal, e.g. for landfill disposals, the maximum rate is EUR 150 per ton and, depending on the environmental burden, the figure comes down to EUR 20 per ton [13]. The tax revenues are mostly transferred to the national budget and then redistributed between environmental agencies and used to improve the ecological situation.…”
Section: Discussionmentioning
confidence: 99%
“…Chen, Oliva and Zhang (2017) show that well‐educated citizens tend to migrate into cleaner areas. Aubert and Chiroleu‐Assouline (2019) and Hafstead and Williams III (2019) find that low‐skilled workers are more affected by environmental regulations. Both of these disproportional responses tend to increase average wage rates in the regulated areas.…”
Section: Robustnessmentioning
confidence: 99%