The Scale and Scope of Environmental Taxation
34 Pages Posted: 20 Feb 2010
Date Written: October 28, 2009
Abstract
This paper provides a discussion of the principles of environmental taxation. It considers the empirical identification of environmental taxes and the problems associated with the choice of the right tax base from the point of view of the correction of market incentives. It then presents a model of optimal second best environmental taxation when taxes must fulfil the double role of modifying market incentives and generating tax revenue. It also considers the issues of the double dividend, the interaction between intrinsic and extrinsic incentives and the problem of designing a tax policy for the alleviation of global environmental problems.
JEL Classification: D62, H23, Q5
Suggested Citation: Suggested Citation