Extent of Expected Pigouvian Taxes and Permits for Environmental Services in a General Equilibrium Model with a natural capital constraint

David Tobón Orozco, Carlos Molina Guerra (carlosmolinaguerra@gmail.com) and John Harvey Vargas Cano (harvey.vargas@udea.edu.co)

No 15258, Borradores Departamento de Economía from Universidad de Antioquia, CIE

Abstract: This paper presents a general equilibrium model to analyze the influence that a contaminating sector has on a natural system’s capacity of resilience, the provision of a public utility service and social welfare, in which the level and capacity to respond to resilience are uncertain, so a probability distribution for the growing loss of resilience with pollution going from a prudent state to an imprudent is defined. And examines first the incidence of expected Pigouvian taxes and finds that these taxes are not enough to maintain resilience because of the cumulative effect of pollution and also that society prefers a prudent tax. Furthermore, the transaction of Permits for Environmental Services (PES) between sector that provides the public utility service and the contaminating sector is allowed. This shows a redistribution of resources very much in favor of the contaminating sector, and there are no incentives to invest in these payments unless the affected have additional objectives for the maximization of private benefit.

Keywords: Contaminación ambiental; incertidumbre; resiliencia; modelo de equilibrio general; impuestos pigouvianos; pagos por servicios ambientales (search for similar items in EconPapers)
JEL-codes: D58 H21 Q56 (search for similar items in EconPapers)
Pages: 31
Date: 2016-11-01
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://bibliotecadigital.udea.edu.co/dspace/bitstr ... edPigouvianTaxes.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:col:000196:015258

Access Statistics for this paper

More papers in Borradores Departamento de Economía from Universidad de Antioquia, CIE Contact information at EDIRC.
Bibliographic data for series maintained by Universidad de Antioquia. Facultad de Ciencias Economicas. (Laura Maria Posada Arboleda) (laura.posada@udea.edu.co).