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Environmental Funds, Public Abatement and Welfare

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  • Takumi HAIBARA

Abstract

We focus on environmental funds aimed at public abatement financed by tax revenue and obtain the result that governments should finance environmental funds with tariff revenue rather than pollution tax revenue in order to increase the funds and welfare when governments increase a pollution tax or reduce a tariff. These results are relevant for countries where an import competing sector protected by a tariff generates pollution emissions and the government seeks the revenues earmarked for the financing of environmental funds. We also show that the optimal pollution tax rate/tariff rate is higher/lower under tariff revenue-financed public abatement than it is under pollution tax revenue-financed public abatement.

Suggested Citation

  • Takumi HAIBARA, 2006. "Environmental Funds, Public Abatement and Welfare," GSICS Working Paper Series 8, Graduate School of International Cooperation Studies, Kobe University.
    • Handle: RePEc:kcs:wpaper:8
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    File URL: http://www.research.kobe-u.ac.jp/gsics-publication/gwps/2006-08.pdf
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    References listed on IDEAS

    as
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    8. Takumi HAIBARA, 2006. "A Note on Trade Liberalization, Public Abatement and Welfare," GSICS Working Paper Series 7, Graduate School of International Cooperation Studies, Kobe University.
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    More about this item

    Keywords

    Environmental funds; pollution taxes; tariffs; public abatement; welfare;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • 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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