Is Pollution a Giffen Good? General-Equilibrium Analysis and Some Policy Implications

Aleksandar Vasilev

EconStor Open Access Articles and Book Chapters, 2019, vol. X, issue 3(35), 488-490

Abstract: This paper takes a simple model with pollution and environmental quality and derives some novel results. In particular, pollution is shown to be a Giffen good. This is a very important finding with clear policy implications, namely that carbon taxes (and pollution permits) are counter-productive, as they lead to increase in pollution, and instead governments should administratively set emission caps.

Keywords: pollution; carbon tax; Giffen good (search for similar items in EconPapers)
JEL-codes: Q2 Q4 Q54 Q58 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:espost:200501

DOI: 10.14505/jemt.v10.3(35).02

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