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Bovenberg, Ary Lans
de Mooij, Ruud A.
Year of Publication: 
Series/Report no.: 
Diskussionsbeiträge - Serie II 258
This paper deals with the so-called 'double-dividend' of an environmental tax reform. We find that, in a model with only labor and a polluting input as factors of production, society faces a trade-off between internalizing environmental externalities and raising revenues in the least distortionary way. However, if either fixed or mobile capital enters the production structure, an ecological tax reform may render the tax structure more efficient from a non-environmental point of view, thereby raising not only environmental quality but also private incomes.
Document Type: 
Working Paper

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