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Determining the Environmental Effects of Indirect Subsidies

Cees van Beers, Jeroen van den Bergh, André de Moor and Frans Oosterhuis
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Cees van Beers: Dept of Economics, Delft University of Technology
André de Moor: National Institute for Public Health and the Environment, Bilthoven, the Netherlands
Frans Oosterhuis: Institute for Environmental Studies, Vrije Universiteit Amsterdam

No 04-047/3, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: Up to now a clear theoretical and methodological framework for economic-environmental analysis of environmentally damaging subsidies is lacking. Environmentally damaging subsidies are all kinds of direct and indirect subsidies aimed at achieving a certain (often non-environmental) goal that produce negative external effects to the natural environment. This article develops a transparent method to determine the environmental impact of indirect government subsidies and derive policy lessons. This method has been applied to several major subsidies in the Netherlands, namely in agriculture, energy, and transport. The results reveal large environmental effects, which need to be taken seriously by policy makers. The method enables policy makers to evaluate the environmental impacts of indirect government subsidies.

Keywords: subsidies; environmental economics; environmental management; policy (search for similar items in EconPapers)
JEL-codes: H2 Q2 Q3 Q5 Q28 (search for similar items in EconPapers)
Date: 2004-04-27
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