Scandinavian Working Papers in Economics
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Department of Economics, Umeå University Umeå Economic Studies, Department of Economics, Umeå University

No 522:
International Cooperation over Green Taxes: On the Impossibility of Achieving a Probability-One Gain

Thomas Aronsson (), Kenneth Backlund () and Karl-Gustaf Löfgren ()

Abstract: This paper concerns international coordination of environmental taxation. The main purpose is to study the global welfare effects that will arise, if there is an agreement between countries to slightly increase their emission taxes. We show that even if each individual country has chosen its prereform emission tax to be 'too low' in comparison with the marginal cost of the environmental damage caused by that particular country's emissions, implementation of the agreement will not necessarily increase the welfare level.

Keywords: Environmental taxation; global external effects; (follow links to similar papers)

JEL-Codes: D61; D62; H21; I31; (follow links to similar papers)

24 pages, February 11, 2000

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