This paper exploits the introduction of the German carbon tax in 2021 as well as excise tax rebates on fuel in both France and Germany, consecutive to the 2022 oil crisis, to infer how fuel tourism responds to changes in relative prices. Based on French high-frequency transaction-level data...

The literature on trade liberalization and environment has not considered federal structures. This paper shows how the design of environmental policy in a federal system has implications for the effects of trade reform. Trade liberalization leads to a decline in pollution taxes regardless of...

A tax on fuel combined with tax-exemptions or subsidies for purchase of fuel-efficient vehicles is implemented in many countries to reduce greenhouse gas emissions and other negative externalities from road traffic. This study, however, shows that a tax on fuel should be combined with heavier...

We introduce a "smart" cap and trade system that eliminates the welfare costs of asymmetric information (“uncertainty”). This cap responds endogenously to technology or macroeconomic shocks, relying on the market price of certificates to aggregate information. It allows policy makers to...

This survey reviews the recent literature on the double-dividend hypothesis of environmental taxes and discusses some recent extensions of the standard model such as the distributional consequences and the importance of the non-separability assumption between consumption goods and environmental...

"Prices versus quantities" (Weitzman 1974), a hugely influential paper, is widely cited (and taught) in current debates about the best policy to reduce greenhouse gas emissions. The paper's criterion for ranking policies suggests that technological uncertainty favors taxes over cap and trade....

We consider a two small open economies model with cross-border pollution that is generated from consumption. Within this framework we examine i) the non-cooperative equilibrium consumption taxes and compare them to when pollution is only local, ii) the cooperative equilibrium consumption taxes...

This paper is the first to investigate the effectiveness of fuel taxation to jointly deliver climate and health benefits in a quasi-experimental setting. Using the synthetic control method, we compare carbon and air pollutant emissions of the actual and synthetic German transport sector...