Tax Policy and the Environment: Theory and Practice

September 1, 1994

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Format: Chicago

David C Nellor, and Ronald T. McMorran Tax Policy and the Environment: Theory and Practice, (USA: International Monetary Fund, 1994) accessed December 22, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper provides a framework for examining environment taxes. It reviews the theoretical efficiency of three types of environment taxes: taxes on emissions or Pigouvian taxes; taxes on productive inputs or consumer goods whose use is related to environmental damage; and environment-related provisions in other taxes. A survey of environment taxes in 42 countries--drawn from developing countries, economies in transition, and industrial countries--illustrates that the use of environment taxes differs dramatically from the recommendations of environment tax theory. This divergence between the theory and practice of environment taxes can be attributed to several factors; environment taxes are difficult to implement, there are many factors that impede their effectiveness, and their introduction may be discouraged by their implications for other policy objectives.

Subject: Consumption taxes, Environment, Environmental policy, Environmental taxes, Revenue performance assessment, Tax efficiency, Taxes

Keywords: Consumption taxes, Cost, Eastern Europe, Environment tax, Environmental damage, Environmental policy, Environmental taxes, External cost, Firm, Marginal social cost, Pigouvian tax, Tax, Tax efficiency, WP

Publication Details

Pages:

50
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1994/106
Stock No:

WPIEA1061994
ISBN:

9781451947083
ISSN:

1018-5941

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