Pollution, Capital Mobility and Tax Policies with Unemployment

Abstract

In this paper we highlight aspects related to the links among unemployment, international capital mobility, and tax policies in a small open developing economy. Without international capital mobility, the joint optimal trade and environmental policies require a zero tariff and an emission tax lower than the Pigouvian tax. With international capital mobility and a capital tax (subsidy), the optimal emission tax rate is smaller (larger) compared to the rate when capital is untaxed. When both the emission tax and the capital tax/subsidy are jointly chosen optimally, then the optimal policy on capital is a lower subsidy, or even a tax, compared to the standard capital subsidy of the no pollution case. Copyright � 2007 The Authors.

Environmental Tax, Urban Minimal Wage and Welfare

“…Rapanos (2007) finds that the environmental tax may increase or decrease urban unemployment in the short run, while it decreases unemployment in the long run. Tsakiris et al (2008) show that the optimal environmental tax is lower than the marginal damage of pollution. Daitoh and Omote (2011) find that a rise in the pollution tax rate would lead to an increase in the urban unemployment.…”

“…However, in the HT model, the implement of minimum wage policy is an important reason for the existence of urban unemployment. Many studies extend the basic HT model to investigate the impact of the environmental preservation policy on the urban unemployment and the national welfare, including Dean and Gangopadhyay (1997), Chao et al (2000), Daitoh (2003;2008;2012), Beladi and Chao (2006), Rapanos (2007), Tsakiris et al (2008) and Daitoh and Omote (2011) (Note 4). However, these existing studies argue that the effects of environmental protection on urban unemployment and welfare are inconclusive.…”

Environmental Policy and Labour Market Imperfection

“…(), Daitoh (, , ), Beladi and Chao (), Rapanos (), Tsakiris et al . (), Daitoh and Omote (), and Ko et al . () are inconclusive.…”

“…One of the interesting issues of the developing countries is whether environmental preservation policy can raise formal employment or not. The results which are obtained by many studies including Dean and Gangopadhyay (1997), Chao et al (2000), Daitoh (2003Daitoh ( , 2008Daitoh ( , 2012, Beladi and Chao (2006), Rapanos (2007), Tsakiris et al (2008), Daitoh and Omote (2011), and Ko et al (2017) are inconclusive.…”

Environmental Protection in the Presence of Unemployment and Common Resources

“…Tsakiris et al (), Tawada and Sun () and Daitoh and Omote () examine the issue on increasing pollution emission and unemployment, but do not consider the environmental resources (e.g. forest).…”