کد مقاله | کد نشریه | سال انتشار | مقاله انگلیسی | نسخه تمام متن |
---|---|---|---|---|
5057752 | 1476606 | 2017 | 4 صفحه PDF | دانلود رایگان |
- We model a federation of K jurisdictions where agents value consumption vs. nature differently.
- First-best efficiency is obtained with the combination of pollution tax rates and lump-sum transfers.
- The optimal tax rates depend only (but in a non-trivial way) on the externality parameters.
- For arbitrary preferences optimal transfers depend on regions' preferences and stocks of nature.
We model an economy of K heterogeneous regions where agents value consumption vs. nature differently. Consumption obtained through pollution-inducing production also generates a negative externality on neighbors. We show that even with a decentralized policy we can obtain first-best efficiency by choosing a combination of pollution taxes in both regions and lump-sum transfers. Moreover, we show that optimal pollution taxes are determined only by the externality parameters, independent of agents' preferences for consumption and nature.
Journal: Economics Letters - Volume 157, August 2017, Pages 79-82