ISSN:
1573-6970
Keywords:
endogenous growth
;
pollution
;
unemployment
;
abatement
;
optimal environmental policy
;
environmental tax reform
Source:
Springer Online Journal Archives 1860-2000
Topics:
Economics
Notes:
Abstract The paper develops a model of endogenous economic growth with pollution externalities and a labor market distorted by union monopoly power and by taxes and transfers. We study the optimal second-best pollution tax and abatement policy and find that a shift toward greener preferences will tend to reduce unemployment, although it will hamper growth. We also find that greater labor-market distortions call for higher pollution tax rates. Finally, we show that a switch from quantity control of pollution combined with grandfathering of pollution rights to regulation via emission charges has the potential to raise employment, growth, and welfere without damaging the environment.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1007/BF00877496
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