On Environmental Taxation Under Uncertainty

T. Aronsson and Sören Blomquist

Working Papers from Uppsala - Working Paper Series

Abstract: This paper addresses optimal taxation, when the relationship between consumption and environmental damage is uncertain and treated as a random variable by policy makers. The main purpose is to analyze how additional uncertainty about this relationship affects the optimal unit tax on the consumption good that is causing environmental damage. We find that the optimal response to this tax depends on (i) the attitudes towards risk and (ii) how other policy instruments affect the demand for the good that is causing damage to the environment.

Keywords: TAXES; RISK; ENVIRONMENT (search for similar items in EconPapers)
JEL-codes: D62 D80 H21 Q20 (search for similar items in EconPapers)
Pages: 14 pages
Date: 1999
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Working Paper: On Environmental Taxation under Uncertainty (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:fth:uppaal:1999:14

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