Performance of the ambient tax: does the nature of the damage matter?

Nasreddine AMMAR, Ahmed Ennasri () and Marc Willinger

Working Papers from LAMETA, Universtiy of Montpellier

Abstract: The ambient tax is often considered as an effcient instrument to achieve a rst best outcome of ambient pollution when the regulator is less informed than the polluters. Since the ambient tax was never imple- mented in the eld, empirical evidence is missing. Available experimental ndings provide mixed evidence: effciency is higher under external dam- age, i.e. if ambient pollution affects non-polluters (Spraggon, 2002, 2003) than under internal damage, i.e. if ambient pollution a¤ects polluters themselves (Cochard et al., 2005). Since these two types of experiments relied on very different designs, it is worthwhile to compare them under a common experimental design. Our main nding is that the ambient tax is equally effcient under external damage than under internal damage.

New Economics Papers: this item is included in nep-env and nep-exp
Date: 2011-12, Revised 2011-12
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