Revenue Neutral Deposit/Refund Systems

Janusz Mrozek ()

Environmental & Resource Economics, 2000, vol. 17, issue 2, 183-193

Abstract: Deposit/refund systems are desirable instruments forenvironmental regulation where monitoring of emissions is difficult. Such systems may gain additional politicalacceptability, however, if implemented so that no net revenues accrue to the government. The revenue neutralityconstraint causes the deposit to drop below the efficient level, and the refund to rise. The extent to which thisconstraint leads to efficiency losses varies with the price elasticity of demand, with compliance costs, with thedegree of correlation between willingness to pay and compliance costs, and with the magnitude of theexternalities. Copyright Kluwer Academic Publishers 2000

Keywords: deposit refund system; externalities; environmental regulation; policy instruments (search for similar items in EconPapers)
Date: 2000
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DOI: 10.1023/A:1008338622801

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