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The Political Economy of Refunded Emissions Payment Programs

Author

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  • Fredriksson, Per G.

    (Department of Economics, Southern Methodist University)

  • Sterner, Thomas

    (Department of Economics, School of Economics and Commercial Law, Göteborg University)

Abstract

Lobbying by pollution firms is commonly viewed as having a negative impact on the stringency of environmental policy. We ask whether lobbying instead can bring about stricter environmental policy, and how imperfect property rights affect the policy outcome. We study the effects on the equilibrium pollution tax of refunding all tax payments to the polluting firms. Relatively clean firms may be induced to lobby for a higher pollution levy. However, this incentive declines when the property rights over the accumulated funds are insecure.

Suggested Citation

  • Fredriksson, Per G. & Sterner, Thomas, 2004. "The Political Economy of Refunded Emissions Payment Programs," Working Papers in Economics 147, University of Gothenburg, Department of Economics.
    • Handle: RePEc:hhs:gunwpe:0147
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    File URL: http://hdl.handle.net/2077/2770
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    References listed on IDEAS

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    1. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Political economy; Lobbying; Environmental Policy; Gaseous emisions; Nox;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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