The effects of an increase in an emission tax rate are analyzed. The initial tax mix of the economy is such that the higher emission rate serves to internalize social costs an simultaneously approaches a second-best tax system (in the absence of environmental distortions). It is shown that this...

The double dividend literature studies the simultaneous pursuit of two objectives: improved quality of the environment through the implementation of an environmental tax (first dividend) and increased social welfare by reducing overall tax distortions (second dividend). This paper investigates...

We study environmental policy in an economy-ecology model featuring multiple deterministic stable steady-state ecological equilibria. The economy-ecology does not settle in either of the deterministic steady states as the environmental system is hit by random shocks. Individual live for two...

This paper examines the double dividend hypothesis in the presence of labour income uncertainty. Empirical evidence shows that uncertainty over labour income is particularly significant in developing, while not negligible in developed countries. Under uncertainty, and assuming incomplete capital...