Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/119701
Authors: 
Glachant, Matthieu
Year of Publication: 
2002
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 96.2002
Abstract: 
In actual environmental policy, the design of actual pollution emission taxes differs significantly with the optimal Pigovian tax. In particular, earmarking prevails and actual taxes are usually combined with regulation. Furthermore tax rates are generally too low to significantly influence polluters' behavior. The paper develops a political economy model to explain these design parameters: the tax rate, earmarking pattern and whether the tax is combined with a regulation. An incumbent government selects these parameters under the influence of a green and a polluters' lobby groups. An earmarked tax is introduced in equilibrium which rate is lower than the regulatory shadow price when the status quo regulation is imperfectly enforced and if the green lobby is sufficiently weak.
Subjects: 
Environmental tax
political economy
earmarking
tax design
common agency politics
lobbying
public choice
JEL: 
D72
D78
H23
Q28
Document Type: 
Working Paper

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