Environmental migration and capital mobility

Chi-Chur Chao, Mong Shan Ee, Jean-Pierre Laffargue and Eden Yu

International Review of Economics & Finance, 2016, vol. 42, issue C, 430-441

Abstract: Based on utility equalization, this paper considers a developing economy with labor migration. Pollution and capital taxes are imposed on producers in the polluted sector. The optimal policy combinations of capital taxes and pollution taxes for the host economy are examined. A zero capital tax is required for increasing mobility of capital to raise real GDP, while a larger than Pigovian pollution tax is needed for enhancing environmental amenities. The impacts on those two optimal tax rates are examined theoretically and numerically if foreign countries adopt higher environmental standards or if foreign countries impose tax credits on foreign investments.

Keywords: Environmental migration; pollution tax; capital tax (search for similar items in EconPapers)
JEL-codes: F22 J61 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Environmental Migration and Capital Mobility (2016)
Working Paper: Environmental Migration and Capital Mobility (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:42:y:2016:i:c:p:430-441

DOI: 10.1016/j.iref.2015.10.014

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