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| Author: | Metcalf, G. E. |
| Title: | Environmental levies and distortionary taxation: Pigou, taxation and pollution |
| Journal: | Journal of Public Economics
2003 : FEB, VOL. 87:2, p. 313-322 |
| Index terms: | Environmental quality Taxation Pollution |
| Language: | eng |
| Abstract: | The author notes an important distinction between the optimal price of environmental quality in a second-best world and the optimal level of environmental quality. Using an analytical general equilibrium model, he shows that for reasonable parameter values, an increase in tax distortions leads to a fall in the optimal Pigouvian tax rate even while environmental tax rates due to changs in the economy is not sufficient for understanding the impact on environmental quality. |
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