Designing green taxes in a political context: From optimal to feasible environmental regulation

Carsten Daugbjerg and Gert Svendsen
Additional contact information
Carsten Daugbjerg: ?

No 01-17, Working Papers from University of Aarhus, Aarhus School of Business, Department of Economics

Abstract: How should green taxation be designed so that it accommodates producer interests? We argue that to design green taxes which are high enough to have the desired incentive effects, tax revenues must be reimbursed, either by earmarking them for environmental subsidies or by reducing other taxes directed at industry. If green tax schemes can be designed this way, industry will have little incentive to mobilise strong opposition to green taxation. However, in practice, the requirement of reimbursement may be difficult to fulfil because, with few exceptions, polluting industries are not homogeneous. This means that reimbursement will redistribute financial resources within industry and thus create winners and losers. Still, green taxes can be used in heterogeneous industries which can be created by operating separate tax schemes for each branch of industry. The Danish case of pesticide taxation demonstrates that relatively high tax levels can be implemented if an equal relationship between the tax object and the object determining the level of refunds exists throughout the sector. This means that revenues can be reimbursed without creating redistribution within producer communities.

Keywords: Green taxation; Policy design; Reimbursement; Lobbyism; Redistribution (search for similar items in EconPapers)
JEL-codes: Q28 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2001-01-01
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.hha.dk/nat/WPER/01-17_gts.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to www.hha.dk:80 (No such host is known. )

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:aareco:2001_017

Access Statistics for this paper

More papers in Working Papers from University of Aarhus, Aarhus School of Business, Department of Economics The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark. Contact information at EDIRC.
Bibliographic data for series maintained by Helle Vinbaek Stenholt ( this e-mail address is bad, please contact ).