Environmental Policy and Public Debt Stabilization

Mouez Fodha and Thomas Seegmuller

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: This article analyzes the consequences of environmental tax policy under public debt stabilization constraint. A public sector of pollution abatement is financed by a tax on pollutant emissions and/or by public debt. In the same time, households can also invest in private pollution abatement activities. We show that the economy may be characterized by an environmental-poverty trap if debt is too large or public abatement is not sufficiently efficient with respect to the private one. However, there exists a level of public abatement and debt for a stable steady state to be optimal.

Keywords: optimality; Environmental taxation; public and private abatements; public debt; trap; optimality. (search for similar items in EconPapers)
Date: 2010-08-31
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00512789
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Related works:
Working Paper: Environmental Policy and Public Debt Stabilization (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:halshs-00512789

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