Optimal environmental tax swaps and double dividend hypothesis

2015/12/05 by Sumei Chen, Chen, Su-Mei, Ling‐Yun He +1
Economics, Econometrics and Finance · #Climate Change Policy and Economics #Economic and Environmental Valuation #FOS: Economics and business #Fiscal Policy and Economic Growth #General Economics (econ.GN)

paper · pdf · doi:10.48550/arxiv.1512.01626

openalex publication_date 2015/12/05 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28

Abstract

Taking environmental tax rate as given, is there an optimal allocation of tax revenues to benefit economic variables? This paper analyzes this issue in an overlapping-generations model with the pollution-related health damage. It finds the optimal allocations towards pollution abatement and labor income to maximize the steady-state lifetime welfare and per-worker output, respectively. Moreover, a greater shift towards labor income might enhance steady-state welfare while reducing per-worker output.

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