Green Taxation in Question: Politics and Economic Efficiency in Environmental Regulation

207 Pages·2001·1.526 MB·English

by  Carsten Daugbjerg, Gert Tinggaard Svendsen (auth.)

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
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Copyright, Designs and Patents Act 1988.
First published 2001 by
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ISBN 978-1-349-41710-0 ISBN 978-0-230-59553-8 (eBook)
DOI 10.1057/9780230595538
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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
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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