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A second-best analysis of alternative instruments for the preservation of natural resources?
Llop Llop, Maria
Universitat Rovira i Virgili. Departament d'Economia; Universitat Rovira i Virgili. Centre de Recerca en Economia Industrial i Economia Pública
The literature on environmental taxation provides a consistent range of knowledge about the welfare impacts of pollution regulation. In particular, an important body of research has warned that partial-equilibrium analysis is not appropriate for showing the interactions of environmental taxes with pre-existing (distortionary) taxes. However, all the research undertaken to date has focused on environmental pollution, while other topics in environmental economics, such as the preservation of natural resources, have not warranted much attention in the optimal taxation literature. This paper examines the role of alternative instruments in preserving natural resources. Using a simple general equilibrium model, the welfare effects of taxes on final goods, taxes on natural resources and extraction permits are analysed by applying a second-best approach, based on the existence of initial distortionary taxes. This analysis not only takes into account the non-use utility coming from the mere existence of natural resources, but also captures the consequences of enjoying environmental goods on labour supply decisions, through the use-value attributed to natural resources. The findings in this paper precise the standard results of the second-best literature on pollution control and offer an extension to the knowledge of the natural resources preservation policies. Keywords: natural resources; environmental regulation; tax-interaction effects; use and non-use value.
33 - Economia
504 - Ciències del medi ambient
Medi ambient -- Impostos
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31 p.
Working Paper
Universitat Rovira i Virgili. Departament d'Economia
Documents de treball del Departament d'Economia;2016-05

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