This paper compares the optimal environmental tax with two alternative definitions of marginal environmental damages. One definition reflects the social marginal rate of substitution between income and the environment; the other reflects the sum of households' marginal willingness to pay. The...

This paper provides an overview of the key economic factors that shape tax policy reform in many high-income countries, developing countries, and/or transition economies. The paper describes and evaluates global and regional developments with respect to tax rates and revenue ratios over the last...

This paper examines the relative merits of two dominant economic instruments for reducing pollution—”green” taxes and tradable permits. Theoretically, the two instruments share many similarities, and on balance, neither seems preferable to the other. In practice, however, most countries...

This paper recommends a system of upstream taxes on fossil fuels, combined with refunds for downstream emissions capture, to reduce carbon and local pollution emissions. Motor fuel taxes should also account for congestion and other externalities associated with vehicle use, at least until...

International experience of energy taxes, particularly on motor fuel, other fuels and electric energy, is discussed. The problems of preserving international competitive positions in the face of energy taxes are discussed. The transition problems of energy tax being capitalised are taken up. The...

In March 1997 the European Commission adopted aproposal that increases existing minimum levels oftaxation on mineral oils by around 10 to 25% andintroduces excises for other energy products. Thispaper analyses the macroeconomic impacts of theproposal. It employs three models: HERMES, GEM-E3,...

This paper analyzes the double dividend issues within the framework of overlapping generations models. We characterize the necessary conditions for obtaining a double dividend, i.e. an improvement of environmental and non-environmental welfare when the revenue from the pollution tax is recycled...