International Cooperation over Green Taxes: On the Impossibility of Achieving a Probability-One Gain

Thomas Aronsson (), Kenneth Backlund () and Löfgren, Karl-Gustaf ()
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Thomas Aronsson: Department of Economics, Umeå University, Postal: S 901 87 Umeå, Sweden
Kenneth Backlund: Department of Economics, Umeå University, Postal: S 901 87 Umeå, Sweden
Löfgren, Karl-Gustaf: Department of Economics, Umeå University, Postal: S 901 87 Umeå, Sweden

No 522, Umeå Economic Studies from Umeå University, Department of Economics

Abstract: This paper concerns international coordination of environmental taxation. The main purpose is to study the global welfare effects that will arise, if there is an agreement between countries to slightly increase their emission taxes. We show that even if each individual country has chosen its prereform emission tax to be 'too low' in comparison with the marginal cost of the environmental damage caused by that particular country's emissions, implementation of the agreement will not necessarily increase the welfare level.

Keywords: Environmental taxation; global external effects (search for similar items in EconPapers)
JEL-codes: D61 D62 H21 I31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr and nep-env
Date: 2000-02-11
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