On Environmental Taxation under Uncertainty

Sören Blomquist and Thomas Aronsson ()
Additional contact information
Thomas Aronsson: Department of Economics, Postal: University of Umeå, SE-901 87 Umeå, Sweden

No 1999:14, Working Paper Series from Uppsala University, Department of Economics

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: Green taxes; Uncertainty; Optimal taxation (search for similar items in EconPapers)
JEL-codes: D62 D80 H21 Q20 (search for similar items in EconPapers)
Pages: 15 pages
Date: 1999-08-10
New Economics Papers: this item is included in nep-env and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Environmental and Resource Economics, 2003, pages 183-196.

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Working Paper: On Environmental Taxation Under Uncertainty (1999)
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