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Regulating chemical emissions with risk-based environmental taxation

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  • Thomas Sadler

Abstract

This paper develops a policy of risk-based environmental taxation for chemical emissions. A scoring index of chemical risk values for target pollutants first takes into account potential human health risk and ecological risk. A common tax base called the risk unit, which reflects the risk values from the scoring index, is then identified for individual pollutants. By determining the number of risk units for target emissions and levying a single tax rate on one risk unit, the risk-based tax system assigns a different pollution price to each chemical release. The policy sets rates according to marginal damage and provides target industry with permanent incentive for pollution abatement. By narrowing the gap between the marginal private cost and constrained marginal social cost of the chemical emission externality, the environmental tax system creates efficiency gains. Copyright International Atlantic Economic Society 2000

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  • Thomas Sadler, 2000. "Regulating chemical emissions with risk-based environmental taxation," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 6(2), pages 287-305, May.
    • Handle: RePEc:kap:iaecre:v:6:y:2000:i:2:p:287-305:10.1007/bf02296109
    DOI: 10.1007/BF02296109
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    1. Bovenberg, A Lans & Goulder, Lawrence H, 1996. "Optimal Environmental Taxation in the Presence of Other Taxes: General-Equilibrium Analyses," American Economic Review, American Economic Association, vol. 86(4), pages 985-1000, September.
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    6. Bovenberg, A.L. & Goulder, L.H., 1996. "Optimal environmental taxation in the presence of other taxes : General equilibrium analyses," Other publications TiSEM 5d4b7517-c5c8-4ef6-ab76-3, Tilburg University, School of Economics and Management.
    7. Thomas A. Barthold, 1994. "Issues in the Design of Environmental Excise Taxes," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 133-151, Winter.
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    Cited by:

    1. Daniel Slunge & Francisco Alpizar, 2019. "Market-Based Instruments for Managing Hazardous Chemicals: A Review of the Literature and Future Research Agenda," Sustainability, MDPI, vol. 11(16), pages 1-20, August.
    2. LeClair, Mark S. & Franceschi, Dina, 2006. "Externalities in international trade: The case for differential tariffs," Ecological Economics, Elsevier, vol. 58(3), pages 462-472, June.

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