- Elgar original reference
Edited by Janet E. Milne and Mikael S. Andersen
Chapter 13: The political economy of environmental taxation
This chapter will—from an economist’s angle—address the political economy of environmental taxation. The first task is to define the term ‘political economy.’ A couple of hundred years ago, the term was used to describe anything covered by the term ‘economics’ today, but over roughly the last century, the term has more specifically referred to economic analyses of political decision processes. Stavins (2004b, 1) stated, ‘In the environmental realm, questions of political economy emerge along three fundamental dimensions, which are closely interrelated but conceptually distinct: (1) the degree of government activity; (2) the form of government activity; and (3) the level of government that has responsibility.’ Oates and Portney (2003, 327) gave the following definition: ‘The term “political economy” has come to take on a variety of shades of meaning. It is now, in fact, a rather elusive term that typically refers to the study of the collective or political processes through which public economic decisions are made.’
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