Pollution Charges as a Source of Public Revenues

  • Wallace E. Oates
Part of the A Publications of the Egon-Sohmen-Foundation book series (EGON-SOHMEN)

Abstract

The economic theory of environmental regulation revolves around the concept of an externality — a form of social cost that is not borne by the agent who is its source. The theory carries with it a straightforward policy implication: to correct for the misallocation, in this case excessive emissions of pollutants, the regulatory agency can place a charge, a unit tax, on the offending activity that is equal to the marginal social damage. Such a Pigouvian tax serves to internalize the social cost associated with polluting emissions and can sustain an economically efficient level of environmental quality.

Keywords

Dioxide Europe Income Arena Abate 

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Copyright information

© Springer-Verlag Berlin · Heidelberg 1993

Authors and Affiliations

  • Wallace E. Oates

There are no affiliations available

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