Renstrom, T. and Spatarom, L. and Marsiliani, L. (2019) 'Optimal taxation, environment quality, socially responsible firms and investors.', International review of environmental and resource economics., 13 (3-4). pp. 339-373.
We characterize the optimal pollution-, capital- and labour-tax structure in a continuous-time model in the presence of pollution (resulting from production), both in the first- and second-best, allowing investors to be driven by social responsibility objectives. The social responsibility objective takes the form of warm-glow, as in Andreoni (1990) and Dam (2011), inducing firms to reduce pollution through increased abatement activity. Among the results, the second-best pollution tax displays an additivity property and the Chamley–Judd zero capital-income tax can be violated under warm-glow preferences. We also show that first- and second-best pollution taxes are positive, under warm-glow preferences, and, under mild assumptions, the latter yield lower first-best pollution taxes and lower pollution intensity.
|Full text:||(AM) Accepted Manuscript|
Download PDF (965Kb)
|Publisher Web site:||https://doi.org/10.1561/101.00000112|
|Publisher statement:||The final publication is available from now publishers via https://doi.org/10.1561/101.00000112|
|Date accepted:||02 August 2019|
|Date deposited:||06 August 2019|
|Date of first online publication:||18 September 2019|
|Date first made open access:||18 March 2020|
Save or Share this output
|Look up in GoogleScholar|