Sustainability policy and environmental policy

Date

2004

Authors

Pezzey, John (Jack)

Journal Title

Journal ISSN

Volume Title

Publisher

Blackwell Publishing Ltd

Abstract

A theoretical, representative-agent economy with a depletable resource stock, polluting emissions and productive capital is used to contrast environmental policy, which internalises externalised environmental values, with sustainability policy, which achieves some form of intergenerational equity. The obvious environmental policy comprises an emissions tax and a resource stock subsidy, each equal to the respective external cost or benefit. Sustainability policy comprises an incentive affecting the choice between consumption and investment, and can be a consumption tax, capital subsidy or investment subsidy, or a combination thereof. Environmental policy can reduce the strength of the sustainability policy needed. More specialised results are derived in a small open economy with no environmental effects on utility.

Description

Keywords

Keywords: environmental policy; intergenerational transfer; sustainability; theoretical study Externalities; Optimality; Policy; Sustainability; Tax

Citation

Source

Scandinavian Journal of Economics

Type

Journal article

Book Title

Entity type

Access Statement

License Rights

DOI

10.1111/j.1467-9442.2004.00355.x

Restricted until

2037-12-31