Arbeitspapier

Vertical Fiscal Externalities and the Environment

We show that imposition of a state-level environmental tax in a federation crowds out preexisting federal taxes. We explain how this vertical fiscal externality can lead unilateral state-level environmental policy to generate a welfare gain in the implementing state, at the expense of other states. Using a computable general equilibrium model of the Canadian federation, we show that vertical fiscal externalities can be the major determinant of the welfare change following environmental policy implementation by a state government. Our numerical simulations indicate that - as a consequence of vertical fiscal externalities - state governments can reduce greenhouse gas emissions by over 20 percent without any net cost to themselves.

Sprache
Englisch

Erschienen in
Series: CESifo Working Paper ; No. 5076

Klassifikation
Wirtschaft
Computable General Equilibrium Models
State and Local Government; Intergovernmental Relations: General
Energy: General
Thema
fiscal externality
climate policy
federalism
computable general equilibrium

Ereignis
Geistige Schöpfung
(wer)
Böhringer, Christoph
Rivers, Nicholas
Yonezawa, Hidemichi
Ereignis
Veröffentlichung
(wer)
Center for Economic Studies and ifo Institute (CESifo)
(wo)
Munich
(wann)
2014

Handle
Letzte Aktualisierung
10.03.2025, 11:43 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Böhringer, Christoph
  • Rivers, Nicholas
  • Yonezawa, Hidemichi
  • Center for Economic Studies and ifo Institute (CESifo)

Entstanden

  • 2014

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