Handbook of Research on Environmental Taxation
Show Less

Handbook of Research on Environmental Taxation

Edited by Janet E. Milne and Mikael S. Andersen

The Handbook of Research on Environmental Taxation captures the state of the art of research on environmental taxation. Written by 36 specialists in environmental taxation from 16 countries, it takes an interdisciplinary and international approach, focusing on issues that are universal to using taxation to achieve environmental goals.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 8: Externality research

Philipp Preiss


Environmental taxes are introduced to raise revenue while at the same time help reduce significantly the damages associated with pressures and emissions from polluting activities. Economists are, however, searching for environmental taxes that are ‘optimal’ in the sense that they reflect accurately the damages at play, not more and not less. If taxes are too low they will be insufficient to internalize environmental damages in market transactions. If taxes are too high they will penalize too extensively the market transactions and cause a loss of economic welfare. From a theoretical point of view environmental taxes need to be ‘just right.’ Such a tax is known as a Pigovian tax. In the debate over competitiveness effects (see Chapter 21 of this Handbook) and the double dividend (see Chapter 12), it makes an important difference whether the environmental taxes introduced are optimal or not. For this reason economists have long grappled with how to place monetary values on environmental damages. There are examples of a spillover from this preoccupation with optimality to certain legal principles codified for environmental taxation. Environmental engineers have made an important contribution by developing the ‘impact pathway’ approach, which is an analytical method that links the sequences leading from an emission to an impact. Models over the transport and dissemination of pollutants are required to account for the end effects and to attach a relevant price tag.

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.