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Redistributional Preference in Environmental Policy

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  • Udo Ebert

Abstract

The paper deals with distributional issues in environmental economics. It considers a single-good market under perfect competition and a negative externality. The decision-maker uses an emission standard or an emission tax, whose revenue is recycled. Under the assumption that she distinguishes between (the groups of) consumers and producers and favors one group, social welfare is measured by a weighted sum of consumer and producer surplus. The optimal levels of both instruments are derived and compared: They can differ. The interaction between distributional considerations and efficiency is discussed.

Suggested Citation

  • Udo Ebert, 2007. "Redistributional Preference in Environmental Policy," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 63(4), pages 548-562, December.
    • Handle: RePEc:mhr:finarc:urn:sici:0015-2218(200712)63:4_548:rpiep_2.0.tx_2-v
    DOI: 10.1628/001522107X269014
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    References listed on IDEAS

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    More about this item

    Keywords

    externality; optimal standard; optimal emission tax; redistribution; perfect competition;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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