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Who Should Bear the Administrative Costs of an Emissions Tax?

John Stranlund () and Carlos Chavez ()

No 2011-3, Working Papers from University of Massachusetts Amherst, Department of Resource Economics

Abstract: All environmental policies involve administrative costs, the costs of implementing and managing policies that extend beyond abatement costs. We examine theoretically the optimal distribution of these costs between the public and regulated sources of pollution. The distribution of administrative costs affects social welfare only if public funds are more expensive than private funds, or if the distribution of administrative costs affects the size of a regulated industry. If having the public take on a larger part of administrative costs increases the size of the industry and this does not lead to lower emissions for a given emissions tax, then it is optimal to make the pollution sources bear all of the administrative costs. A necessary, but not sufficient, reason for having the public bear part of the cost burden is if aggregate emissions decrease as a result.

Keywords: Emissions Taxes; Pigouvian Taxes; Administrative Costs; Pollution Control (search for similar items in EconPapers)
JEL-codes: L51 Q58 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2011-04
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
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Journal Article: Who should bear the administrative costs of an emissions tax? (2013) Downloads
Working Paper: Who Should Bear the Administrative Costs of an Emissions Tax? (2011) Downloads
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