A Note on Weak Double Dividends

Gilbert Metcalf (), Mustafa H. Babiker and John Reilly
Additional contact information
Mustafa H. Babiker: Arab Planning Institute
John Reilly: MIT

The B.E. Journal of Economic Analysis & Policy, 2004, vol. topics.4, issue 1

Abstract: A weak double-dividend is the proposition that the welfare improvement from a green tax reform, where the revenue from an environmental tax is used to reduce other tax rates, must be greater than the welfare improvement from a reform where the environmental taxes are returned in a lump sum fashion. We show in this note that a weak double-dividend need not hold in a world with multiple distortions. In an economy with multiple distortions one must choose carefully which tax rates to reduce, or one can do worse than a lump sum redistribution of the environmental tax revenues.

Keywords: environmental tax policy; second-best taxation; general equilibrium analysis (search for similar items in EconPapers)
JEL-codes: H2 Q2 (search for similar items in EconPapers)
Date: 2004

Downloads: (external link)
http://www.bepress.com/cgi/viewcontent.cgi?article=1275&context=bejeap (application/pdf)

Related works:
Working Paper: A Note on Weak Double Dividends (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:bpj:bejeap:v:topics.4:y:2004:i:1:n:2

Access Statistics for this article

More articles in The B.E. Journal of Economic Analysis & Policy from Berkeley Electronic Press
Series data maintained by Avi Warner ().