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
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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
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Objekttyp
- Arbeitspapier
Beteiligte
- Böhringer, Christoph
- Rivers, Nicholas
- Yonezawa, Hidemichi
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2014