The Pigouvian Tax Rule in the Presence of an Eco-Industry
Date
01.01.2005
01.01.2005
Authors
Bernard Sinclair-Desgagné, Alain-Désiré Nimubona
JEL Code
H23,L13
H23,L13
Keywords:
Pigouvian taxes,Environment industry
Pigouvian taxes,Environment industry
Publisher
Climate Change and Sustainable Development
Climate Change and Sustainable Development
Editor
Carlo Carraro
Carlo Carraro
Pollution abatement goods and services are now largely being delivered by a specialized “eco-industry.” This note reconsiders Pigouvian taxes in this context. We find that the optimal emission tax will depart from the marginal social cost of pollution according to the polluters’ and the environment firms’ relative market power.