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Environmental fiscal polices might be ineffective to control pollution

Fernández Casillas, Mª Esther and Pérez Sánchez, Rafaela María and Ruiz Andújar, Jesús (2003) Environmental fiscal polices might be ineffective to control pollution. [ Documentos de trabajo de Instituto Complutense de Análisis Económico (ICAE); nº 0307, 2003, ]

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Abstract

In a one sector growth model with pollution in the utility function, the competitive equilibrium can be indeterminate for plausible values of the intertemporal substitution
elasticity of consumption and under constant returns to scale. The tax rate on pollution does not enter the condition characterizing indeterminacy. This means that the
government is not able to control emissions in the economy by using environmental policies. Non-separability between private consumption and pollution in the utility function is crucial for this result.


Item Type:Working Paper or Technical Report
Uncontrolled Keywords:Growth model, Control emissions, Environmental policies
Subjects:Social sciences > Economics > Econometrics
Series Name:Documentos de trabajo de Instituto Complutense de Análisis Económico (ICAE)
Volume:2003
Number:0307
ID Code:7684
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Deposited On:11 Mar 2008
Last Modified:06 Feb 2014 07:55

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