A Political Economy Approach to Resource Taxation: Weak Sustainability, Revenue Recycling and Regional Planning

Massimiliano Mazzanti and Roberto Zoboli

No 201202, Working Papers from University of Ferrara, Department of Economics

Abstract: We present conceptual and empirical insights on the issue of resource taxation, an intrinsic regional environmental policy. It deals with the implementation of environmental taxes and environmental planning at regional level, as tools aimed at achieving weak sustainability for non renewable resources like aggregates, extracted for a diverse set of economic aims. We frame the discussion in the spirit of refreshing the need of ecological and resource tax reforms at national and regional level-. We do note and discuss the intrinsic peculiarities of resource taxes with respect to emission taxes, namely the integration with regional planning, the use of revenue for weak sustainability objectives, the different role by played technology and efficiency. Factors that are to be taken into account in any specific implementation. We empirically investigate resource taxation issues by focusing on aggregate extraction management and policy of two large Northern Italian regions, Lombardy and Emilia-Romagna. We conclude that the possible effects of extraction charges for the aggregate market development in Italy can be very limited. The level of charges is generally too low to be expected to have an effect on demand (through aggregate prices) and supply of aggregates. The environmental objectives of planning are, at least for the moment, other than reducing extraction, and they generally consist of minimising external impacts, to support sustainable management of landscapes, and to provide multi-value public goods within the local area. The evidence shows that even more for resource taxes a political economy analysis that encompasses institutional and planning issues is needed to effectively shape environmental policies. The complementarity of land use planning and economic instruments is a key driver of sustainability performances and witness reciprocal influences. The unintended effects of economic instruments are also a crucial thing for evaluating effectiveness and efficiency. Those include positive effects of ‘institutional kind’ on the governance and organizational performance of the integrated policy-planning framework.

Keywords: Resource tax reforms; aggregates; environmental charges; regional planning; sustainability; ex post compensations; Political economy; unintended effects; environmental federalism (search for similar items in EconPapers)
JEL-codes: Q32 R11 R52 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2012-01-20
New Economics Papers: this item is included in nep-ene and nep-env
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