Environmental and Resource Economics

, Volume 31, Issue 3, pp 253–274 | Cite as

Green Tax Reform in an Oligopolistic Industry



OECD countries reduce or eliminate certain taxes when they introduce new environmental taxes. The purpose of this paper is to analyze the incidence of such green tax reform in an oligopolistic industry. The paper shows that a rise in taxes could result in the expansion of the aggregate pollution in the presence of a large technology gap. The paper further shows that the government loses tax revenue as a result of the green tax reform if it continues to apply the same environmental standard. This implies that the government needs to raise environmental standards to keep the existing level of public spending after a green tax reform.


environmental standard green tax reform oligopolistic conjecture tax revenue 

JEL classifications

H2 D43 Q2 


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Copyright information

© Springer 2005

Authors and Affiliations

  1. 1.Department of EconomicsKansai UniversitySuita-shiJapan

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