The Political Economy Of Environmental Taxes With An Aging Population

Download or read book The Political Economy of Environmental Taxes with an Aging Population written by Tetsuo Ono and published by . This book was released on 2014 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper develops a two-period overlapping-generations model with environmental externalities and uncertain lifetimes, and studies how two sources of population aging, greater longevity and a lower rate of population growth, affect the politically determined environmental tax and the quality of the environment. It is shown that greater longevity and a lower rate of population growth have entirely different effects on these factors; greater longevity has no effect on the environmental tax and has a non-positive effect on the environmental quality, whereas a lower rate of population growth has a negative effect on the tax and has a positive effect on the quality. In addition, the political decision-making on the tax leads to an inefficient allocation of capital and environmental quality.