Optimal Tax Policies with Private-Public Clean-Up, Cross-Border Pollution and Capital Mobility
31 Pages Posted: 18 Dec 2002
Date Written: December 2002
Abstract
This paper builds a model of a region with two non-identical countries, cross-border pollution and free movements of goods and capital within the region. Pollution reduces welfare and there is simultaneous private and public pollution abatement. Public pollution abatement is financed with the use of lump-sum and pollution tax revenue. The introduction of public pollution abatement enables us to derive the optimal pollution taxes in terms of the marginal cost of public pollution abatement. We derive and compare for each country the Nash and cooperative lump-sum and pollution taxes and examine how cross-border pollution and capital mobility affect them. Finally, we examine the impact of capital mobility on the effectiveness of pollution taxes on net pollution.
Keywords: Optimal Taxes, Public Pollution Abatement, Cross-Border Pollution, Capital Mobility
JEL Classification: F18, F22, H21
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Trade, Growth and the Environment
By Brian R. Copeland and M. Scott Taylor
-
Trade, Spatial Separation, and the Environment
By Brian R. Copeland and M. Scott Taylor
-
Unmasking the Pollution Haven Effect
By Arik Levinson and M. Scott Taylor
-
International Trade and the Environment: A Framework for Analysis
By Brian R. Copeland and M. Scott Taylor
-
Moving to Greener Pastures? Multinationals and the Pollution Haven Hypothesis
-
Moving to Greener Pastures? Multinationals and the Pollution-Haven Hypothesis
-
Is Environmental Policy a Secondary Trade Barrier? An Empirical Analysis
By Josh Ederington and Jenny Minier
-
A Simple Model of Trade, Capital Mobility, and the Environment
By Brian R. Copeland and M. Scott Taylor
-
Is Trade Good or Bad for the Environment? Sorting Out the Causality