The Political Economy of Refunded Emissions Payment Programs

Per Fredriksson and Thomas Sterner

No 147, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: Lobbying by pollution firms is commonly viewed as having a negative impact on the stringency of environmental policy. We ask whether lobbying instead can bring about stricter environmental policy, and how imperfect property rights affect the policy outcome. We study the effects on the equilibrium pollution tax of refunding all tax payments to the polluting firms. Relatively clean firms may be induced to lobby for a higher pollution levy. However, this incentive declines when the property rights over the accumulated funds are insecure.

Keywords: Political economy; Lobbying; Environmental Policy; Gaseous emisions; Nox (search for similar items in EconPapers)
JEL-codes: D72 D78 Q28 (search for similar items in EconPapers)
Pages: 9 pages
Date: 2004-01-07
New Economics Papers: this item is included in nep-res
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Citations: View citations in EconPapers (4)

Published in Economic Letters, 2005, pages 113-119.

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Journal Article: The political economy of refunded emissions payment programs (2005)
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