Environmental Tax Reform and the "Double Dividend" Hypothesis in a Small Open Economy.

Autor:	Zhou Z; College of Economics and Management, Southwest University, Chongqing 400715, China.; School of Political Science and Public Management, Southwest University, Chongqing 400715, China., Zhang W; College of Economics and Management, Southwest University, Chongqing 400715, China., Pan X; College of Economics and Management, Southwest University, Chongqing 400715, China., Hu J; College of Economics and Management, Southwest University, Chongqing 400715, China., Pu G; School of Finance, Zhongnan University of Economics and Law, Wuhan 430073, China.
Jazyk:	angličtina
Zdroj:	International journal of environmental research and public health [Int J Environ Res Public Health] 2019 Dec 27; Vol. 17 (1). Date of Electronic Publication: 2019 Dec 27.
DOI:	10.3390/ijerph17010217
Abstrakt:	In this paper, we build and analyze a general equilibrium model to evaluate the effects of environment tax reform on a small open economy in a "suboptimal environment" with existing tax distortions. We then use the macroeconomic data from the Chongqing Municipality in China to conduct simulations to empirically test our analytic results. Our main findings include the followings. First, an increase in environmental tax rate can effectively reduce the use of polluting consumer goods by households as well as investment in polluting factors by enterprises. Hence, an increase in environmental tax rate can improve environmental quality and obtain "environmental dividend". Second, an increase in environmental tax rate can negatively impact employment, family income and economic growth. Hence, there is no "non-environmental dividend" effect. Third, an increased environmental tax rate has both substitution effect and income effect on household consumption. On the one hand, it motivates households to substitute polluting consumer goods with clean consumer goods. On the other hand, it lowers the total consumption level of households. Fourth, we show that the "double dividend" hypothesis on environmental tax is invalid. And the optimal environmental tax under the suboptimal environment is lower than the Pigouvian tax rate. Finally, we discuss the policy implications of our results. Competing Interests: The authors declare no conflict of interest.
Databáze:	MEDLINE
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