Externalities and Production Efficiency
The author brings together two of government's primary challenges: environmental protection, and taxation to generate revenues. If negative externalities can be reduced not only by changes in consumption patterns, but also by making each activ...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2000/04/437745/externalities-production-efficiency http://hdl.handle.net/10986/18836 |
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okr-10986-18836 |
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oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
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World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ABATEMENT ABATEMENT COSTS ABATEMENT TECHNOLOGIES ATMOSPHERIC POLLUTION BUDGET CONSTRAINTS COAL COMBUSTION COMMODITY TAXES CONSTANT RETURNS TO SCALE CONSUMERS CONSUMPTION PATTERNS CORROSION CUMULATIVE EMISSIONS DAMAGES DETERGENTS DISTORTIONARY EFFECTS DUST ELASTICITIES EMISSION EMISSION FACTORS EMISSION PER UNIT EMISSION REDUCTIONS EMISSION STANDARDS EMISSION TAX EMISSION TAXES EMISSIONS EMISSIONS STANDARDS ENVIRONMENTAL PROTECTION ENVIRONMENTAL TAX EQUILIBRIUM EXTERNALITIES EXTERNALITY FUEL FUELS GAS INCOME INCOME TAXES INDIRECT UTILITY INDIRECT UTILITY FUNCTION INFERIOR GOODS LEISURE MARGINAL COST MARGINAL COSTS MARGINAL UTILITY MARGINAL VALUE NEGATIVE EXTERNALITIES NITROGEN OXIDES OIL OZONE POLICY INSTRUMENTS POLL TAXES POLLUTERS POLLUTION POLLUTION ABATEMENT POLLUTION LEVEL POLLUTION LEVELS POSITIVE EXTERNALITIES PRICE ELASTICITIES PRIVATE GOODS PRODUCERS PRODUCTION EFFICIENCY PRODUCTION TECHNOLOGY PRODUCTIVITY PUBLIC ECONOMICS PUBLIC EXPENDITURES PUBLIC FINANCE PUBLIC GOOD PUBLIC GOODS PUBLIC SECTOR RETURNS TO SCALE TAX RATES TAXATION UTILITY FUNCTION VOLATILE ORGANIC COMPOUNDS WASTE WELFARE FUNCTION WILLINGNESS TO PAY ENVIRONMENTAL PROTECTION TAXATION REVENUE MEASURES CONSUMPTION PATTERNS PRODUCER PRICING POLICY GOVERNMENT FINANCE POLICY FRAMEWORK POLLUTION CRITERIA POLLUTION ABATEMENT TAX ENFORCEMENT COMMODITY TRADE LEVY WILLINGNESS TO PAY ENVIRONMENTAL PROTECTION |
| spellingShingle |
ABATEMENT ABATEMENT COSTS ABATEMENT TECHNOLOGIES ATMOSPHERIC POLLUTION BUDGET CONSTRAINTS COAL COMBUSTION COMMODITY TAXES CONSTANT RETURNS TO SCALE CONSUMERS CONSUMPTION PATTERNS CORROSION CUMULATIVE EMISSIONS DAMAGES DETERGENTS DISTORTIONARY EFFECTS DUST ELASTICITIES EMISSION EMISSION FACTORS EMISSION PER UNIT EMISSION REDUCTIONS EMISSION STANDARDS EMISSION TAX EMISSION TAXES EMISSIONS EMISSIONS STANDARDS ENVIRONMENTAL PROTECTION ENVIRONMENTAL TAX EQUILIBRIUM EXTERNALITIES EXTERNALITY FUEL FUELS GAS INCOME INCOME TAXES INDIRECT UTILITY INDIRECT UTILITY FUNCTION INFERIOR GOODS LEISURE MARGINAL COST MARGINAL COSTS MARGINAL UTILITY MARGINAL VALUE NEGATIVE EXTERNALITIES NITROGEN OXIDES OIL OZONE POLICY INSTRUMENTS POLL TAXES POLLUTERS POLLUTION POLLUTION ABATEMENT POLLUTION LEVEL POLLUTION LEVELS POSITIVE EXTERNALITIES PRICE ELASTICITIES PRIVATE GOODS PRODUCERS PRODUCTION EFFICIENCY PRODUCTION TECHNOLOGY PRODUCTIVITY PUBLIC ECONOMICS PUBLIC EXPENDITURES PUBLIC FINANCE PUBLIC GOOD PUBLIC GOODS PUBLIC SECTOR RETURNS TO SCALE TAX RATES TAXATION UTILITY FUNCTION VOLATILE ORGANIC COMPOUNDS WASTE WELFARE FUNCTION WILLINGNESS TO PAY ENVIRONMENTAL PROTECTION TAXATION REVENUE MEASURES CONSUMPTION PATTERNS PRODUCER PRICING POLICY GOVERNMENT FINANCE POLICY FRAMEWORK POLLUTION CRITERIA POLLUTION ABATEMENT TAX ENFORCEMENT COMMODITY TRADE LEVY WILLINGNESS TO PAY ENVIRONMENTAL PROTECTION Eskeland, Gunnar S. Externalities and Production Efficiency |
| relation |
Policy Research Working Paper;No. 2319 |
| description |
The author brings together two of
government's primary challenges: environmental
protection, and taxation to generate revenues. If negative
externalities can be reduced not only by changes in
consumption patterns, but also by making each activity
cleaner (abatement efforts), how shall inducements to
various approaches be combined? If negative externalities
are caused by agents as different as consumers, producers,
and government, how does optimal policy combine inducements
to reduce pollution? Intuitively it seems right to tax
emissions neutrally, based on marginal damages - no matter
which activity pollutes, or whether the polluter is rich or
poor, consumer or producer, private or public. The author
provides a theoretical basis for such simplicity. Three
assumptions are critical to his analysis: 1) Returns to
scale do not influence the traditional problem of revenue
generation. 2) consumers have equal access to pollution
abatement opportunities (but he also relaxes this
assumption). 3) Planners can differentiate policy
instruments (emission taxes or abatement standards) by
polluting good, and by whether the polluter is a consumer,
producer, or government, but they cannot differentiate such
instruments (or commodity taxes) by personal
characteristics, or make them non-linear in individual
emissions. Among the author's findings and conclusions:
Abatement efforts and consumption adjustments at all stages
are optimally stimulated by a uniform emission tax, levied
simply where emissions occur. It simplifies things that the
optimal abatement is independent of whether the car is used
by government, firms, or households - for weddings, or for
work. It also simplifies implementation, that the stimulus
to abatement at one stage (say, the factory) is independent
of whether it yields emission reductions from the factory,
or form others (say, from car owners who by the
factory's products). Finally, ministers of finance and
of the environment should coordinate efforts, but they need
not engage in each other's business. The minister of
environment need not know which commodities are elastic in
demand, and thus would bear a low commodity tax. The finance
minister need not know which commodities or agents pollute
or who pays emissions taxes. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Eskeland, Gunnar S. |
| author_facet |
Eskeland, Gunnar S. |
| author_sort |
Eskeland, Gunnar S. |
| title |
Externalities and Production Efficiency |
| title_short |
Externalities and Production Efficiency |
| title_full |
Externalities and Production Efficiency |
| title_fullStr |
Externalities and Production Efficiency |
| title_full_unstemmed |
Externalities and Production Efficiency |
| title_sort |
externalities and production efficiency |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2000/04/437745/externalities-production-efficiency http://hdl.handle.net/10986/18836 |
| _version_ |
1764441583482044416 |
| spelling |
okr-10986-188362021-04-23T14:03:46Z Externalities and Production Efficiency Eskeland, Gunnar S. ABATEMENT ABATEMENT COSTS ABATEMENT TECHNOLOGIES ATMOSPHERIC POLLUTION BUDGET CONSTRAINTS COAL COMBUSTION COMMODITY TAXES CONSTANT RETURNS TO SCALE CONSUMERS CONSUMPTION PATTERNS CORROSION CUMULATIVE EMISSIONS DAMAGES DETERGENTS DISTORTIONARY EFFECTS DUST ELASTICITIES EMISSION EMISSION FACTORS EMISSION PER UNIT EMISSION REDUCTIONS EMISSION STANDARDS EMISSION TAX EMISSION TAXES EMISSIONS EMISSIONS STANDARDS ENVIRONMENTAL PROTECTION ENVIRONMENTAL TAX EQUILIBRIUM EXTERNALITIES EXTERNALITY FUEL FUELS GAS INCOME INCOME TAXES INDIRECT UTILITY INDIRECT UTILITY FUNCTION INFERIOR GOODS LEISURE MARGINAL COST MARGINAL COSTS MARGINAL UTILITY MARGINAL VALUE NEGATIVE EXTERNALITIES NITROGEN OXIDES OIL OZONE POLICY INSTRUMENTS POLL TAXES POLLUTERS POLLUTION POLLUTION ABATEMENT POLLUTION LEVEL POLLUTION LEVELS POSITIVE EXTERNALITIES PRICE ELASTICITIES PRIVATE GOODS PRODUCERS PRODUCTION EFFICIENCY PRODUCTION TECHNOLOGY PRODUCTIVITY PUBLIC ECONOMICS PUBLIC EXPENDITURES PUBLIC FINANCE PUBLIC GOOD PUBLIC GOODS PUBLIC SECTOR RETURNS TO SCALE TAX RATES TAXATION UTILITY FUNCTION VOLATILE ORGANIC COMPOUNDS WASTE WELFARE FUNCTION WILLINGNESS TO PAY ENVIRONMENTAL PROTECTION TAXATION REVENUE MEASURES CONSUMPTION PATTERNS PRODUCER PRICING POLICY GOVERNMENT FINANCE POLICY FRAMEWORK POLLUTION CRITERIA POLLUTION ABATEMENT TAX ENFORCEMENT COMMODITY TRADE LEVY WILLINGNESS TO PAY ENVIRONMENTAL PROTECTION The author brings together two of government's primary challenges: environmental protection, and taxation to generate revenues. If negative externalities can be reduced not only by changes in consumption patterns, but also by making each activity cleaner (abatement efforts), how shall inducements to various approaches be combined? If negative externalities are caused by agents as different as consumers, producers, and government, how does optimal policy combine inducements to reduce pollution? Intuitively it seems right to tax emissions neutrally, based on marginal damages - no matter which activity pollutes, or whether the polluter is rich or poor, consumer or producer, private or public. The author provides a theoretical basis for such simplicity. Three assumptions are critical to his analysis: 1) Returns to scale do not influence the traditional problem of revenue generation. 2) consumers have equal access to pollution abatement opportunities (but he also relaxes this assumption). 3) Planners can differentiate policy instruments (emission taxes or abatement standards) by polluting good, and by whether the polluter is a consumer, producer, or government, but they cannot differentiate such instruments (or commodity taxes) by personal characteristics, or make them non-linear in individual emissions. Among the author's findings and conclusions: Abatement efforts and consumption adjustments at all stages are optimally stimulated by a uniform emission tax, levied simply where emissions occur. It simplifies things that the optimal abatement is independent of whether the car is used by government, firms, or households - for weddings, or for work. It also simplifies implementation, that the stimulus to abatement at one stage (say, the factory) is independent of whether it yields emission reductions from the factory, or form others (say, from car owners who by the factory's products). Finally, ministers of finance and of the environment should coordinate efforts, but they need not engage in each other's business. The minister of environment need not know which commodities are elastic in demand, and thus would bear a low commodity tax. The finance minister need not know which commodities or agents pollute or who pays emissions taxes. 2014-06-30T18:21:34Z 2014-06-30T18:21:34Z 2000-04 http://documents.worldbank.org/curated/en/2000/04/437745/externalities-production-efficiency http://hdl.handle.net/10986/18836 English en_US Policy Research Working Paper;No. 2319 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |