The Political Economy of Refunded Emissions Payment Programs

Per G. Fredriksson () and Thomas Sterner ()
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Thomas Sterner: Department of Economics, School of Economics and Commercial Law, Göteborg University, Postal: Box 640, SE 405 30 GÖTEBORG

No 147, Working Papers in Economics from Göteborg University, Department of Economics

Abstract: Lobbying by pollution firms is commonly viewed as having a negative impact on the stringency of environmental policy. We ask whether lobbying instead can bring about stricter environmental policy, and how imperfect property rights affect the policy outcome. We study the effects on the equilibrium pollution tax of refunding all tax payments to the polluting firms. Relatively clean firms may be induced to lobby for a higher pollution levy. However, this incentive declines when the property rights over the accumulated funds are insecure.

Keywords: Political economy; Lobbying; Environmental Policy; Gaseous emisions; Nox (search for similar items in EconPapers)
JEL-codes: D72 D78 Q28 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-res
Date: 2004-01-07
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Published in Economic Letters, 2005, pages 113-119.

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Journal Article: The political economy of refunded emissions payment programs (2005)
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Persistent link: http://EconPapers.repec.org/RePEc:hhs:gunwpe:0147

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