2020
DOI: 10.1111/rode.12731
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Pollution permits, green taxes, and the environmental poverty trap

Abstract: We compare the steady states and transition dynamics under pollution permits and under green taxes in an overlapping generations model with endogenous longevity. Multiple steady states can emerge under pollution permits. One nontrivial steady state is an environmental poverty trap (EPT). This steady state is characterized by low capital and high pollution. An economy operating in the neighborhood will gravitate toward this steady state in the long run. The other nontrivial steady state featuring high capital a… Show more

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Cited by 4 publications
(2 citation statements)
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“…In particular, life expectancy in old age was assumed as endogenous, and crucially, even depends on health status denoted by . In line with previous research [ 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 ], we assumed the following specific functional forms for survival probability in old age: where is an adjustment parameter to ensure that the expected life is within a reasonable range [ 43 ]. Therefore, is increasing from 0 to b and is strictly concave with .…”
Section: Model Set Upmentioning
confidence: 99%
“…In particular, life expectancy in old age was assumed as endogenous, and crucially, even depends on health status denoted by . In line with previous research [ 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 ], we assumed the following specific functional forms for survival probability in old age: where is an adjustment parameter to ensure that the expected life is within a reasonable range [ 43 ]. Therefore, is increasing from 0 to b and is strictly concave with .…”
Section: Model Set Upmentioning
confidence: 99%
“…Green tax practices were first introduced in developed countries such as the United States, the European Union, Switzerland, New Zealand, Japan, Canada, and South Korea and achieved some success (Levinson, 2007;Wei andAadlan, 2020: 1033). In addition, the practice of green taxes is relatively new in developing countries such as Ukraine, Mexico, Turkey, Brazil, and Chile.…”
Section: The Concept Of Eco-tax (Green Tax) and Its Application In Th...mentioning
confidence: 99%