The marginal efficiency effects of taxes and subsidies in the presence of externalities

Ballard, Charles L.; Medema, Steven G.

doi:10.1016/0047-2727(93)90020-t

Cited by 98 publications

(43 citation statements)

References 10 publications

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“…Empirical evidence suggests that pollution causes serious productivity losses both in industrialized countries (see, e.g., Alfsen, Brendemoen and Glomsr~l (1992), Brendemoen and Vennemo (1994), and Ballard and Medema (1993)) and in developing countries (see e.g. Van Ewijk and Van Wijnbergen (1995)).…”

Section: Introductionmentioning

confidence: 99%

Environmental tax reform and endogenous growth

Bovenberg

Mooij

1997

Journal of Public Economics

194

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This paper explores how an environmental tax reform impacts pollution, economic growth and welfare in an endogenous growth model with pre-existing tax distortions. We find that a shift in the tax mix away from output taxes towards pollution taxes may raise economic growth through two channels. The first channel is an environmental production externality, which determines :he positive effect of lower aggregate pollution on the productivity of capital. The second channel is a shift in the tax burden away from the net return on investment towards profits. The paper also shows that the optimal tax on pollution may exceed its Pigovian level if tax-shifting towards profits is large and production externalities are important.

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Section: Introductionmentioning

confidence: 99%

Environmental tax reform and endogenous growth

Bovenberg

Mooij

1997

Journal of Public Economics

194

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“…Alternative specification and differences in the underlying data are the major reason why the findings of empirical work are less unique than those of the analytical work. While the models of Goulder (1995a) and Bovenberg/Goulder (1996) trace no double dividend for the US economy, the models of Jorgenson/Wilcoxen (1994) and Ballard/Medema (1993) confirm the double dividend hypothesis for the same economy.…”

Section: Exploring the Deviancymentioning

confidence: 66%

Double Dividend of Climate Protection and the Role of International Policy Coordination in the EU — An Applied General Equilibrium Analysis with the GEM-E3 Model

Conrad

Schmidt

1999

Man-Made Climate Change

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Non-technical summaryNational economic concerns still hinder the implementation of effective policy measures that would enable a significant reduction of greenhouse gas emissions. Considering other economic problems like unemployment, the enforcement of Maastricht criterions and highly tensed social security systems, the global warming issue seems to be of less priority on the political agenda of EU governments. Nevertheless, the international political pressure forces policy-makers to do something and show at least political willingness. One frequently mentioned instrument that might enable governments to escape the dilemma is the idea of an environmental tax reform. The hope that advocats have in mind is to obtain two positive effects at the same time (double dividend): a decrease in greenhouse gas emissions and an increase in employment and/or consumer welfare.Our analysis shows that, from an empirical point of view, obtaining an economic dividend in terms of welfare by undertaking an 'intelligent' environmental tax reform remains at least possible, but relying on it seems rather optimistic as there are numerous uncertain influences that might alter the sign of the welfare effect. Obtaining an economic dividend in terms of employment seems to be more robust. But, the hope that an environmental tax reform might contribute substantially to solve the problem of unemployment melts away. AbstractWhile there is some hope that the ongoing climate change negotiations will soon come up with concrete, time scheduled and binding emission reduction commitments, the question of how to achieve these targets is still unsolved. The objective of this paper is to analyse alternative settings of an environmental tax reform and its economic and environmental impacts on the EU. The methodological framework used is based on a multi-country and multi-sectoral computable general equilibrium model for eleven EU-member states. The emphasis of the analysis lies on the institutional setting of a carbon dioxide reduction policy and on the specification of the labour market. The institutional settings analysed are related to the degree of environmental policy coordination. As standard neo-classics neglegt the problem of unvoluntary unemployment, we relax this restriction in the second part of the analysis in order to test alternative (more rigid) labour market specifications. The major findings of the paper can be summarized as follows: 1) There is some potential for a double dividend in the EU. 2) Coordination beats not always unilateral actions. 3) Labour market rigidities play a crucial role to both, the double dividend and the coordination issue. AcknowledgementThis research is based on two modelling projects financed by the JOULE-II programme of the European Comission (DGXII). We are indebted to Pantelis Capros, Takis Georgakopoulos (NTUA-Athens) Stef Proost and Denise Van Regemorter (CES at the Katholic University of Leuven), who are co-developers of the model GEM-E3. Nevertheless, we take responsibility for all errors and omission...

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“…Besides that a large number of models exist that analyze environmental tax reform in a computable general equilibrium (see, for example, Ballard andMedema (1993), Goulder (1995a), Boyd, Krutilla and Viscusi (1995), Bovenberg and Goulder (1996) or Parry, Williams and Goulder (1999)). These models all incorporate many sectors and several factors, but they do not, with the exception of Böhringer and Rutherford (1997) 7 , address the topic of discriminating factor taxes within an environmental tax reform.…”

Section: Qwurgxfwlrqmentioning

confidence: 99%

Ecological Tax Reform with Exemptions for the Export Sector in a Two Sector Two Factor Model

Schleiniger

2000

SSRN Journal

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The marginal efficiency effects of taxes and subsidies in the presence of externalities

Cited by 98 publications

References 10 publications

Environmental tax reform and endogenous growth

Environmental tax reform and endogenous growth

Double Dividend of Climate Protection and the Role of International Policy Coordination in the EU — An Applied General Equilibrium Analysis with the GEM-E3 Model

Ecological Tax Reform with Exemptions for the Export Sector in a Two Sector Two Factor Model

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