Abstract
Revenue-neutral ecological tax reforms are known to yield a green dividend,but not an efficiency dividend,in general. This result is shown to be not counterintuitive when one looks at such reforms as providing more of the costly public good `environmental quality’ financed by distortionary taxes. In that perspective the double dividend conjecture is tantamount to assuming that more environmental quality can be bought for less money,which is rather unlikely even if general equilibrium interdependencies are accounted for.
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Helpful comments from Daniel Weinbrenner are gratefully acknowledged. Remaining errors are the author’s sole responsibility.
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Pethig, R. (2003). Ecological Tax Reform and Efficiency of Taxation: A Public Good Perspective. In: Böhringer, C., Löschel, A. (eds) Empirical Modeling of the Economy and the Environment. ZEW Economic Studies, vol 20. Physica, Heidelberg. https://doi.org/10.1007/978-3-642-57415-3_12
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DOI: https://doi.org/10.1007/978-3-642-57415-3_12
Publisher Name: Physica, Heidelberg
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