NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Margaret A. Walls

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NBER Working Papers and Publications

June 2005The Incidence of Pollution Control Policies
with Ian W.H. Parry, Hilary Sigman, Roberton C. Williams III: w11438
This paper reviews theoretical and empirical literature on the household distribution of the costs and benefits of pollution control policies, and ways of integrating distributional issues into environmental cost/benefit analysis. Most studies find that policy costs fall disproportionately on poorer groups, though this is less pronounced when lifetime income is used, and policies affect prices of inputs used pervasively across the economy. The policy instrument itself is also critical; freely allocated emission permits may hurt the poor the most, as they transfer income to shareholders via scarcity rents created by higher prices, while emissions taxes offer opportunities for progressive revenue recycling. And although low-income households appear to bear a disproportionate share of environ...

Published: Tietenberg, Tom and Henk Folmer (eds.) International Yearbook of Environmental and Resource Economics 2006/2007. Cheltenham, UK: Edward Elgar, 2006.

 
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