Green Taxation in Question: Politics and Economic Efficiency in Environmental Regulation PDF
Preview Green Taxation in Question: Politics and Economic Efficiency in Environmental Regulation
Green Taxation in Question Also by Carsten Daugbjerg POLICY NETWORK UNDER PRESSURE: Pollution Control, Policy Reform and the Power of Farmers Also by Gert Tinggaard Svendsen PUBLIC CHOICE AND ENVIRONMENTAL REGULATION: Tradable Permit Systems in the United States and CO Taxation in Europe 2 Green Taxation in Question Politics and Economic Efficiency in Environmental Regulation Carsten Daugbjerg Associate Professor Department of Political Science Aarhus University Denmark and Gert Tinggaard Svendsen Associate Professor Department of Economics Aarhus School of Business Denmark © Carsten Daugbjerg and Gert Tinggaard Svendsen 2001 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2001 by PALGRAVE Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N. Y. 10010 Companies and representatives throughout the world PALGRAVE is the new global academic imprint of St. Martin’s Press LLC Scholarly and Reference Division and Palgrave Publishers Ltd (formerly Macmillan Press Ltd). ISBN 978-1-349-41710-0 ISBN 978-0-230-59553-8 (eBook) DOI 10.1057/9780230595538 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Daugbjerg, Carsten. Green taxation in question : politics and economic efficiency in environmental regulation / Carsten Daugbjerg and Gert Tinggaard Svendsen. p. cm. Includes bibliographical references and index. 1. Air pollution—Government policy—Europe—Case studies. 2. Pollution—Government policy—Europe—Case studies. I. Svendsen, Gert Tinggaard, 1963– II. Title. HC240.9.A4 D38 2001 336.2’7836373’094—dc21 2001032121 10 9 8 7 6 5 4 3 2 1 10 09 08 07 06 05 04 03 02 01 For our youngest daughters, Asta Marie and Marie This page intentionally left blank Contents List of Figures x List of Tables xi Preface xii 1 The Politics and Economics of Green Taxation 1 Carsten Daugbjerg and Gert Tinggaard Svendsen Contribution 1 The economics of green taxation 7 Research method 9 Structure 12 2 Group Mobilization and Rent-Seeking 17 Gert Tinggaard Svendsen Introduction 17 Group mobilization 19 CO2 tax levels in OECD countries 21 Rent-seeking in Denmark, Norway and Sweden 23 Conclusion 40 3 Parties Matter 45 Carsten Daugbjerg Introduction 45 Institutionalization of the Left±Right Dimension 47 Parties and Green Taxation 53 Green taxation in the industrial sector 56 Liberal and conservative governance: Denmark and Britain 57 Social democratic governance: Sweden and Norway 62 Governance from the centre: the Netherlands 67 The five country comparison 72 Moving beyond correlation 73 The importance of policy design in green taxation 80 vii viii Contents 4 Policy Networks 83 Carsten Daugbjerg Introduction 83 The policy network concept 85 Green tax design 89 Policy networks and tax design 91 Fertilizer and pesticide tax schemes in Scandinavia 92 Agriculural policy networks 99 Exercising power? 105 Conclusion 112 5 Designing Green Taxation 117 Carsten Daugbjerg with Gert Tinggaard Svendsen Introduction 117 Making green taxation more attractive 120 Reimbursement 120 Taxing production inputs or outputs? 123 Administration of tax revenues 124 The problem of redistributive reimbursement 128 Labour taxes 130 Annual turnover 131 Corporate tax 132 Nature of target sector 132 Conclusion: the limitations and opportunities of green taxation 134 6 Designing Permit Trading 137 Gert Tinggaard Svendsen Introduction 137 Why permit trading? 139 Grandfathering 139 Gains from permit trading 141 Interest groups 144 Special reward and hot air 144 Industry 145 Environmental groups 145 Hypotheses 146 The American Acid Rain Program 146 Market activity 146 Contents ix Monitoring 148 Auction 148 Industry and environmental groups 150 The Kyoto Protocol 151 Trade level and interest groups 153 Bureaucratic preferences 156 Governmental preferences 157 Policy recommendations 160 Conclusions 163 Appendix: Observers at Kyoto Meeting 169 Notes 175 Bibliography 179 Index 197
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