A. Lans Bovenberg

Environmental quality and pollution-augmenting technological change in a two-sector endogenous growth model

This paper explores the link between environmental quality and economic growth in an endogenous growth model that incorporates pollution-augmenting technological change. It examines the conditions under which sustainable growth is both feasible and optimal. We explore also how the government should intervene to ensure the optimal levels of natural and knowledge capital, which share a publicgoods character. We establish the conditions for a more ambitious environmental policy to raise long-run growth.

Green Tax Reforms and the Double Dividend: an Updated Reader's Guide

This paper draws on the literature on the double dividend to explore whether an environmental tax reform yields not only a cleaner environment but also non-environmental benefits. In doing so, it investigates how environmental tax reforms impact welfare, the distribution of income, and employment. Also the political economy of environmental taxation is discussed.

Transitional Impacts of Environmental Policy in an Endogenous Growth Model

A rotary type electrical switch includes one housing section having a plurality of lugs and another housing section having resilient brackets which snap into engagement with the lugs to assemble the housing. The stationary electrical contacts comprise leaf spring elements which are held in place within the housing by bridge members. A spider member electrically connects selected contacts in response to manipulation of a shaft on which the spider is carried.

Environmental tax reform and endogenous growth

This paper explores the effects of an environmental tax reform on pollution, economic growth and welfare in an endogenous growth model with pre-existing tax distortions. We find that a shift in the tax mix away from output towards pollution may raise economic growth through two channels. The first channel is an environmental production externality, which determines the positive effect of lower aggregate pollution on the productivity of capital. The second channel is a shift in the tax burden away from the net return on investment towards profits. The paper also shows that, if tax shifting towards profits is large and environmental amenities are unimportant, the optimal tax on pollution may exceed its Pigovian level.

Does Monetary Unification Lead to Excessive Debt Accumulation

If discretionary monetary policy implies an inflation bias, monetary unification boosts the accumulation of public debt. The additional debt accumulation is welfare reducing only if governments are sufficiently myopic. In the presence of myopic governments, debt ceilings play a useful role in avoiding excessive debt accumulation in a monetary union and allow a conservative, independent central bank to focus on price stability

Environmental tax policy and intergenerational distribution

Abstract We study the effects of environmental taxation within the context of an overlapping generations model. The quality of the environment is modelled as a durable consumption good. Introduction of the environmental tax harms old existing generations and benefits young existing generations as well as all future generations. Increasing the tax in a Pareto-improving manner is easier the higher the pre-existing tax. The reverse holds if tax policy is decided by majority rule. A suitably designed bond policy can be used to redistribute the efficiency gains due to the internalisation of environmental externalities across the generations.

Consequences of environmental tax reform for involuntary unemployment and welfare

We investigate the welfare effects of environmental tax reform, i.e. raising environmental taxes and using the proceeds to reduce distortionary taxes on labour. The framework of analysis is a small open economy with involuntary unemployment due to a rigid consumer wage. Environmental tax reform boosts not only environmental quality but also employment if substitution between labour and resources is easy, the production share of the fixed factor is large, and the initial tax rates on resources and profits are small. If the initial tax system is sub-optimal with a negligible tax on resources, profits rise as well.

Tax Reform, Structural Unemployment and the Environment

The effects of environmental tax reform, i.e., using the proceeds of a higher energy tax rate to lower the labour tax rate, on wage formation, employment and environmental quality are analysed in the context of a small open economy with structural unemployment caused by hiring costs. We find that such a reform may boost employment if it shifts the tax burden away from workers towards those without employment in the formal sector. Environmental tax reform succeeds in shifting the tax burden away from workers in the formal sector if higher energy taxes reduce earnings in the informal sector by reducing labour productivity.

Green Policies and Public Finance in a Small Open Economy

We explore the effects of greener preferences for the public finances, employment, and the domestic capital stock in a second-best framework. We find that greener preferences typically result in capital flight. Also, employment declines despite the factor substitution that is induced by a lower tax on labor and a higher tax on natural resources. If the uncompensated wage elasticity of labor supply is positive, private utility declines. Public consumption, in contrast, may rise if most of the improvement in environmental quality occurs through a lower level rather than a cleaner composition of economic activity. However, if the labor supply curve bends backwards, private utility rises while public consumption falls. Copyright 1994 by The editors of the Scandinavian Journal of Economics.

Environmental taxes and labor-market distortions

Abstract It is sometimes argued that by using the revenues from environmental taxes to reduce distortionary taxes on labor, governments can reap a ‘double dividend’, namely, not only an improvement in environmental quality, but also a reduction in the efficiency costs associated with raising public revenue. By employing a general equilibrium model, this paper finds that, contrary to common wisdom, environmental taxes typically render the overall tax system a less efficient instrument to finance public spending. Furthermore,high estimates for the marginal efficiency costs of existing taxes weaken, rather than strengthen, the case for environmental taxes.