Second-Best Pollution Taxation and Environmental Quality

Thomas Gaube ()
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Thomas Gaube: Max Planck Institute for Research on Collective Goods, Bonn, Germany

No 2005_9, Discussion Paper Series of the Max Planck Institute for Research on Collective Goods from Max Planck Institute for Research on Collective Goods

Abstract: This paper deals with second-best pollution taxation by investigating allocations instead of the corresponding tax rates. Assuming certain restrictions on utility and that the marginal revenue from environmental taxation is positive, it is shown that environmental quality is higher in second best where only distortionary taxes are used to finance public expenditures than in the first-best optimum where lump-sum taxes are available.

Keywords: environmental taxation; public goods (search for similar items in EconPapers)
JEL-codes: H21 H41 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2005-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published in Frontiers of Economic Analysis & Policy 1, 2005, No. 1, Article 1

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Persistent link: https://EconPapers.repec.org/RePEc:mpg:wpaper:2005_09

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