Environmental Tax and the Distribution of Income with Heterogeneous Workers

Transcription

1 Envronmental Tax and the Dstrbuton of Income wth Heterogeneous Workers Mrelle Chroleu-Assoulne Pars School of Economcs - Unversty Pars Panthéon-Sorbonne Centre d Econome de la Sorbonne, 06-2 Bd de l Hôptal PARIS Cedex 3 Tel : Fax : emal : Mrelle.Chroleu-Assoulne@unv-pars.fr Mouez Fodha Pars School of Economcs - Unversty Pars Panthéon-Sorbonne Centre d Econome de la Sorbonne, 06-2 Bd de l Hôptal PARIS Cedex 3 Tel : Fax : emal : Mouez.Fodha@unv-pars.fr March 2, 2009 Abstract Ths paper analyzes the envronmental tax polcy ssues when labor s heterogeneous. The objectve s to assess whether an envronmental tax polcy could be Pareto mprovng, when the revenue of the polluton tax s recycled by a change n the labor tax rate or by a change n the dstrbutve propertes of the labor tax. We show that, dependng on the producton functon elastctes and on the heterogenety characterstcs of labor supply, an approprate polcy mx could be desgned n order to leave each workers class unharmed by the envronmental tax reform. It conssts n an ncrease of the progressvty of the labor tax together wth a decrease of the mnmal wage tax rate. JEL class caton: D60 - D62 - E62 - H23 Key words: Envronmental tax - Overlappng generatons model - Intergeneratonal equty- Double dvdend.

2 Envronmental Tax and the Dstrbuton of Income wth Heterogeneous Workers Abstract: Ths paper analyzes the envronmental tax polcy ssues when labor s heterogeneous. The objectve s to assess whether an envronmental tax polcy could be Pareto mprovng, when the revenue of the polluton tax s recycled by a change n the labor tax propertes. We show that, dependng on the producton technology and on the heterogenety characterstcs of labor, a polcy mx could be desgned n order to leave each workers class unharmed. It conssts n an ncrease of the progressvty together wth a decrease of the mnmal wage tax rate. JEL class caton: D60 - D62 - E62 - H23. Keywords: Envronmental tax - Heterogenous agents - Welfare analyss - Tax progressvty. 2

3 Introducton The costs and bene ts of the envronmental polces are unequally dstrbuted among agents. The poor and the rch seem to assgn d erent degrees of prorty to envronmental protecton (Baumol and Oates []), snce wealther ndvduals would accept to pay for a hgher level of envronmental qualty (consdered as a normal good). Beyond ths fact, dstrbutve elements also matter when we consder how the costs of a polcy of envronmental protecton are lkely to be dstrbuted among ndvduals wth d erng ncomes. Most of exstng studes are emprcal works dealng manly wth the dstrbuton of bene ts of the envronmental polces among ncome classes (Chrstansen and Ttenberg [8], Ellott et al. [0], Harrson [3], Peskns [8]), hence neglectng the cost sde of the polces. One can nfer from some emprcal studes emphaszng the regressvty of the ndrect taxes, that any envronmental polcy s lkely to also be regressve. In partcular, for the French case, a tax bearng on energy or transport consumpton harms the lowest wage households three tmes more heavly than the hghest wage ones (Ruz and Trannoy [9]). Moreover, the usual recyclng of the envronmental tax revenues through a decrease n the labor tax rate could be also regressve. Ths pont s of nterest n a world n whch nequalty has assumed hgh prorty among socal ssues. The objectve of ths paper s therefore to desgn a balanced envronmental tax reform able to correct these regressve propertes and to leave any workers class better o. We consder an overlappng generatons economy wth pollutng captal. Our model shares the mean features of Chroleu-Assoulne and Fodha [6] and [7]. As n Chao and Peck [5] or Wllams [2] or [22], we assume that the degradaton of envronmental qualty has a negatve mpact on the total productvty of factors. Ths assumpton s just ed by the results of an ncreasng number of emprcal studes measurng the health e ects of polluton (OCDE [5]) and the mpact of the health of workers on labor productvty (Bloom et al. [2], n a sample consstng of both developng and ndustral countres, found that good health, proxed by lfe expectancy, has a szable, postve e ect on economc growth). Snce Ostro [6], many papers emphasze the loss of productvty caused by the health e ects of polluton, e.g. Samakovls et al. [20], or Pervn et al. [7] for ar-polluton, and also Bosello et al. [3] or Hübler et al. [4] for the health e ects of clmate change. For example, accordng to Bosello et al. [3] strong heat stress causes a productvty loss 3

4 of 3% and extreme heat a loss of 2%. Another source of productvty loss orgnates n the mpact of polluton on the qualty of natural resources (Gollop and Swnand [] for the agrcultural sector). We assume that the producton technology s a functon of captal and heterogeneous labor. Heterogeneous workers lve two perods (young and old) and earn heterogeneous wages correspondng to ther skll and consequently to ther productvty. The labor tax s a very general one that could be ether a progressve, regressve or proportonal tax. Our demographc assumptons allow us to take nto account several ncome classes; ndeed, we consder () the heterogenety of the labor market (hgh wages - sklled workers, mddle wages, low wages - non sklled workers...), () the heterogenety of the ndvdual ncome source (wages for workers, savngs for retred). The envronmental polcy conssts of ncreasng the Pgovan tax on savngs. We then characterze the necessary condtons for the obtanng of a double dvdend,.e. an mprovement of the envronmental qualty and an mprovement of the welfare when the revenue of the polluton tax s recycled by a change n the labor tax rates. Prevous studes show that the obtanng of a double dvdend requres such economc condtons that the double dvdend hypothess seems unrealstc. Conversely, we show that the condtons for the obtanng of a double dvdend le on the dstrbutve propertes of the labor taxes. Even when the double dvdend s not possble, the cost of the polluton regulaton can be mnmzed by a new desgnng of the progressvty of the labor tax nstead of an homogenous cut n the labor tax rates. We conclude that the dstrbutve propertes of the tax polcy could be one of the nstruments of nternalzaton of the envronmental externaltes. The paper s organzed as follows. Secton 2 presents the model and secton 3 presents the welfare analyss of a tax polcy. Secton 4 gves the spec caton of the balanced tax reform. In secton 5, we present the envronmental e ects of the tax reform and secton 6 examnes the welfare e ects of such a reform. The last secton concludes. 2 The model We consder an overlappng generatons economy wth pollutng technology of producton.e. wth pollutng captal. Heterogeneous workers lve two perods (young and old) and earn heterogeneous wages correspondng to ther skll and consequently to ther productvty. The labor tax s a very general one that could be ether a progressve, regressve or proportonal tax. We assume that N t ndvduals are born n perod t and that populaton 4

5 remans constant, so we can normalze N t to unty. Each household s characterzed by ts labor class (or skll) and supples one unt of labor when she s young and earns a wage w t ; she dvdes her labor ncome between consumpton and savng s t. In the second perod the household consumes her savng and the nterest she earns. 2 [0; ] represents the ndvdual ntertemporal dscount factor. The welfare of an ndvdual born at t s measured wth the ntertemporal separable utlty functon 2 : wth c y t U c y t ; co t+ = ( ) ln c ;y t + ln c ;o t+ denotng the rst-perod consumpton of the agent born at t, c o t+ her secondperod consumpton. The two nstantaneous components of the utlty functon obvously exhbt the usual propertes: they are ncreasng n ther argument, strctly concave and satsfy the Inada condtons. The real nterest rate s r t+. As the captal s pollutng, the envronmental polcy conssts n a Pgovan tax on savngs e. wrtten as follows: t w t = c y t + ( + e t ) s t c o t+ = ( + r t+) s t The household s budget constrants can be The household s problem s to choose her consumpton path to maxmze her lfetme utlty subject to the ntertemporal budget constrant. Ths yelds the optmal consumpton and savng path of the representatve household, wthn the Damond s framework (Damond [9]) wth a homothetc utlty functon: 8 c y t = ( ) t w t >< c o t+ = ( + r t+) ( + e t ) t w t >: s t = t ( + e t ) w t The producton sector conssts of many rms, each of them beng characterzed by the same Cobb-Douglas producton functon F. They use d erent knds of labor (hgh wages - sklled workers, mddle wages, low wages - non sklled workers...) and the total productvty of factors A (P t ) s negatvely a ected by polluton P t because polluton deterorates the Our long term vew allows us to assume full employment. Moreover we focus on e cency double dvdend (accordng to Goulder [2]) and not on employment double dvdend. 2 We do not ntroduce any drect e ect of polluton on the households welfare, but only the ndrect one through the consequences on productvty of the degradaton of envronmental qualty. Indeed the drect e ect would have no mpact on the welfare dstrbuton among heterogenous agents whle the ndrect one a ects the wage gaps. () (2) 5

6 health of workers or the qualty of natural resources (A 0 (P ) < 0 and A 00 (P ) 0.e. A (P ) = P e wth e > 0): Y t = A (P t ) F (K t ; L ;t ) = A (P t ) K t where > 0 and 0 stand for the shares of the nput factors n producton, + =, L = q :N and q =. The maxmzaton problem of the representatve rm s (takng the output prce as numerare): IY = L ;t Max K;fL g t = Y t wtl ;t = = A (P t ) K t IY = L ;t ( + r t ) K t wtl ;t = ( + r t ) K t wth t s equal to unty. the current net revenue, w t the real wage rates. The deprecaton rate of captal Snce markets are compettve, captal and labor earn ther margnal products: 8 Y t >< = + r t >: K t Y t L ;t = w t (3) Ths yelds, at the equlbrum of the labor markets (and wth N = ): The rato of wages s: Y t = A (P t ) F (K t ; L ;t ) = A (P t ) K t IY = q Y t wt q wt = () w Y t = q wt t q q We assume by now that the d erent labors are ordered by growng sklls,.e. growng wages: by w t > w t, q > q 6

7 We assume that government spendng s entrely nanced by current taxes. The government s budget constrant states that ts purchases (G) must equal, at each perod, ts tax revenues generated by the polluton tax and the labor tax: q twt + e t = q s t = G t (4) = We de ne a progressvty ndex of the labor tax, such as: = + a (a; ) where s the mnmal wage tax rate, a a 8 > and a = a (a; ) = 0; a > 0: (a; ) =@a > 2 a (a; ) =@a 2 = (a; ) =@ > 0 2 a (a; ) =@ 2 R 0: We consder the general case for the characterstcs of the tax progressvty (resp. regressvty 2 a (a; ) =@ 2 < 0). For example, the desgn of progressvty ts well the characterstcs of the French tax system 2 a (a; ) =@ 2 > 0. Ths yelds! q w = Y = Y ( ) + a (a; ) = = = Assume a (a; ) = ab () wth b () = 0; b 0 > 0; b 00 T 0: We obtan: a (a; ) = a b () = ab = = P let B I b () > 0 whch s constant for any I <. = The polluton ow s due to the captal, and we assume that the welfare s a ected by the stock of polluton only through ts e ect on the global factor productvty. The dynamcs of polluton s descrbed by the followng equaton: P t = ( h) P t + K t (5) where h s the constant rate of natural absorpton of polluton (0 < h < ). steady-state equlbrum, the total stock of polluton s gven by: At the P = h K 7

8 As for now, assume for realsm that 0 < e < whch means that the drect contrbuton of captal to output s greater than the ndrect one through polluton and productvty 3. The equlbrum condton of the captal market, meanng that the captal stock n perod t+ s the amount saved by young ndvduals n perod t, s obtaned by substtutng the zero-pro t condton, the government s budget constrant (eq. 4) and the household s budget constrants (eq. ) nto the equlbrum of the output good market. It wrtes: K t = q s t = = + e t q t ( ) ab w t (6) wth Y t q = w t Hence, at the steady-state equlbrum: K = + e ( ) ab Y = + e XY wth X = ( ) ab > 0; constant for a gven tax system. The equlbrum output and captal stock are solutons of the followng system: 8 >< K = + e XA (P ) Q I = >: Y = + e X q A (P ) I Q K e ; ; a; A (P ) = q Y e ; ; a; A (P ) (7) Takng nto account the spec ed polluton externalty on the productvty: 8 >< K = + e X >: Y = + e X ( e) h e IQ = e ( e) h e IQ = q q ( e) ( e) (8) 3 Assumng the contrary ( < e) would smplfy the analyss but ths case would be of neglgble economc nterest because any rse n e would result n a decrease of K allowng an ncrease of Y. 8

9 3 Welfare analyss Lke Chroleu-Assoulne and Fodha [7], we examne here the welfare e ects of the tax change for a generaton durng ts lfe-cycle, once the nal steady-state equlbrum s reached. In ths secton, the welfare ssue s thus a long term one. One can measure the welfare e ects of small tax changes by the margnal excess burden. Ths margnal excess burden corresponds to the addtonal ncome that needs to be provded to the representatve household to keep her utlty at ts ntal level: ths s the compensatory ncome varaton, denoted dr. It stands for the excess welfare loss of the consumers over and above the tax revenues collected by the government and can be nterpreted as the hdden costs of nancng publc spendng: a postve value for the margnal excess burden ndcates a loss n welfare after the tax reform. Let us determne the compensatory ncome varaton whch, after the tax reform, would leave the level of lfe-cycle utlty unchanged (du y dcy o dco = 0 ( + r) ( + e ) dcy + dc o = 0 The ntertemporal budget constrant of household wrtes: Remember that w = c y + ( + e ) ( + r) co c o ( + r) = ( ) ( + e ) cy We use the rst-order condtons of the representatve household s program and the de nton of the compensatory ncome varaton dr: dw w d + b () da + dr = d^c y ^c o = ^co 2 dr + ( + r) ( + r) d e + ( + e ) + r d^co ( + e ) ^c o ( + r) 2 dr + ^co ( + r) d e ths leads to: dr = dw + w d + b () da ( + e ) ^c o ( + r) 2 dr + ^co ( + r) d e (9) 9

10 Unlke Bovenberg and de Moj [4] and the greater part of the lterature on ths subject, t s here mpossble to dstngush an envronmental component and a non-envronmental one, because polluton and producton a ect each other. In ths paper, we are thus constraned to depart from the usual de nton of the double dvdend (Goulder [2]) because of ths non-separablty: a double dvdend wll be characterzed by the smultaneous decrease of polluton (whch stands for the usual rst dvdend) and ncrease of economc welfare (whch depends here also of the polluton level). Proposton The ncrease of the envronmental tax s regressve.e. t harms more heavly the lowest wages. Proof. Let us compute the steady-state value of the compensatory ncome varaton for agent : dr q Y = Z ( + e ) d e (0) + (Z ) + ( ) X + (Z ) B X + b () ( ) ( d ) da wth Z = e ( e) > 0 f > e > 0 constant. Hence, when d = da = 0, one obtans, for any envronmental tax ncrease d e > 0 : dr = Z ( + e Y d e ) q Notce that from the optmalty condtons of the rm (eq. 3) and the equlbrum condton of the labor market, we have q Y = w : We then have then, as dr = Z w ( + e ) d e e > 0, dr > 0 for every. But dr w s smaller when s hgher (.e. also hgh) and when w s hgher. When the envronmental polcy harms the consumers, the relatve burden s greater for the less sklled. 0

11 4 The spec caton of the balanced tax reform We assume an exogenous ncrease of the polluton tax rate, mposed by the government n order to control polluton. The amount of government s purchases s assumed ex post nvarant. Ths ncrease d e of the polluton tax rate can be accompaned by a varaton of the labor tax rates d by two potental means: an homogenous varaton of all labor tax rates (d ) or a varaton n the progressvty of the labor tax (da for > through a varaton of a). At the steady state equlbrum, the government s budget constrant s: ( ) + ab Y + e K = G The lnk between the varatons of the polluton tax and the characterstcs of the labor tax s obtaned through the d erentaton of ths constrant, whch s qute drect (usng eq. 8). Any balanced tax reform s then characterzed by the followng relatonshp between d e, d and da (wth dg = dq = d = 0): where = ( ( ) d + Bda = ( + ) ( + ) X d e + e ) + ab + K Y ( e) e Z X 0 (f e > 0) s constant. Fscal e cency mples ( + ) ( + ) X + e > 04. We wll study two polar cases for balancng ths envronmental tax reform: unform varaton of all labor tax rates (wth nvarant progressvty da = 0):, d = ( + ) ( + ) X d e ( ) + e = d e varaton of the progressvty, wth nvarant labor tax rate for the low-sklled (d = 0): 4 If < e scal e cency would always be ver ed., da = ( + ) X d e ( + ) B + e = d e

12 Proposton 2 The sgn of the balanced tax reform multplers and s a pror undetermned and depends on the ntal tax rates and on the values of the varous elastctes. Proof. () The numerator measures the e ect of the change n polluton tax rate on ts revenue. There are both a value e ect (the tax revenue ncreases wth the tax rate, for unchanged producton) and a tax base e ect (producton decreases as the tax rate ncreases, thus the tax base erodes) whch work n opposte ways. As a result, ths term mght be postve or negatve. () The denomnator measures the e ect of the change n labor tax rate on ts revenue. There are also both a value e ect (the tax revenue ncreases wth the tax rate, for unchanged wage) and a tax base e ect (the wages decrease as the tax rate ncreases, thus the tax base erodes) whch work n opposte ways. As a result, ths term too mght be postve or negatve. As the sgns of the numerator and of the rst and thrd terms of the denomnator are undetermned, the sgn of the necessary change n the labor tax s also undetermned. 5 The envronmental e ects of the tax reform As steady-state polluton depends only on steady-state producton per capta, we nd straghtforward that the rst dvdend (:e: a decrease of polluton) s reached f dp = h dk < 0: Ths condton rewrtes: dk K = d e ( e) + e + ( ) d + Bda < 0 X d e Under the assumpton 0 < e <, we have ( e) > 0, whch mples + e + ( ) d + Bda > 0: We then have the two cases correspondng to the two alternatve X polces: nvarant progressvty (da = 0) : varaton of the progressvty d = 0 : d e ( ) d e > + e X d e + e > Bd e X : We easly show that a su cent condton for obtanng the envronmental dvdend s the negatvty of the tax polcy multplers or : More generally, we obtan a rst 2

13 dvdend f the multplers are not too hgh: 8 >< >: < < X ( + e ) ( ) X ( + e ) B Ths means that the decrease of the labor tax (ether of the mnmal wage tax rate or of the progressvty ndex) should be not too strong n order to not jeopardze the envronmental bene t of the reform. 6 The welfare e ects of the tax reform As each polcy does not a ect all classes equally, one can wonder whch one wll be preferred by each worker s class. Proposton 3 () The envronmental tax reform preferred by the workers of the lowest classes conssts of a decrease n the mnmal wage tax rate () but the one preferred by the workers of the hghest classes conssts of a decrease n the progressvty of the wage tax rate. Proof. Let us compare the compensatory ncome varatons assocated to each polcy. Frst case (dr( )): unform varaton of all labor tax rates (wth nvarant progressvty): da = 0 and d = d e dr( ) q Y = Z ( + e ) d e (Z ) X ( ) + ( ) d e Second case (dr(a) ): varaton of the progressvty, wth nvarant labor tax rate for the low-sklled: d = 0, da = b () da and da = d e dr(a) q Y = Z ( + e ) d e (Z ) X B + b () ( ) d e 3

14 The sgns of these compensatory ncome varatons depend on the values of the characterstcs of the economy (, e, b(), ) and of the ntal tax rates ( e,, a). We now compare the relatve e ects on welfare of the two tax polces. Consequently, we have to determne the sgn of = Y hdr q ( ) dr(a) for the workers of class. ( ) = Usng = (Z ) X ( ) + (Z ) ( + ) X B + b () ( T 0 ), we nd that ths sgn s equal to the sgn of: B b () B = b () There s one pecular workers s class ~{ such that 5 : b (~{) = I b () I b () b (~{) s the average of the coe cents of progressvty, weghted by the shares of each workers class n the output. Each class of workers of a hgher skll would prefer a decrease n the progressvty ndex, da < 0, and, at the contrary, each less sklled class of workers would prefer a decrease n the mnmal rate of the wage tax, d < 0 (Fgure correspondng to the French case of a progressve labor tax). The result above suggests that, n the case where some workers classes would be sufferng from a deteroraton of ther welfare after the above tax reforms, an approprate polcy mx could be desgned n order to leave each workers class unharmed by the envronmental tax reform : t wll consst n an ncrease of the progressvty ndex together wth a decrease of the mnmal wage tax rate. 5 More precsely, b (~{) I b() I and b (~{ ) < I b(). I 4

15 Fgure : An llustraton of workers s class threshold n the French case Assume that the balanced tax reform s de ned by d < 0 and da = d wth > 0 hence da > 0. Such a compensaton of the ncrease n the envronmental tax rate wll mply a greater decrease of than above because the degree of progressvty s rased. Proposton 4 For economes such that a decrease n the mnmal wage rate doesn t suf- ce to reestablsh the welfare of some workers class, one can choose n order to ensure that all classes wll be better o wth the envronmental tax reform. Proof. Let us precse the lnk mpled by such a polcy between the ncrease n the envronmental tax rate and the decrease n the mnmal rate of the wage tax. d e = d da = d = B d The compensatory ncome varaton of the balanced mx polcy s: dr() " " q Y d e = dr q Y d e + (Z ) B X B + b () Z ## ( + e ) B wth Z > 0; X > 0; constants. dr() S 0; 8 = ; :::I: dr () s not monotonous n b (), nor n, 8. If dr( ) < 0; 8 = ; :::I, all classes wll be better o even wth = 0: 5

16 If 9; dr( ) > 0; as the functon dr () s bound, there s one { whch maxmzes t: h { = INT arg max dr() One can choose > 0 n order to nullfy dr { () : t ensures that all classes wll be better o (ther compensatory ncome varaton are all negatve or null). = Z ab ({) h ( + e ab ({) ( ) (Z ) ) X + " B Z # ab ({) ( + e (Z ) B ) X ( ab ({)) b ({) 7 Concluson In ths paper, we have shown that a budget-neutral envronmental tax reform may result n a double dvdend (de ned as a decrease n polluton and an ncrease n the global economc welfare), even when the economy s characterzed by heterogenous agents (old and young) and many worker classes (heterogenous labor). We have also emphaszed that the condtons for the obtanng of a double dvdend le on the dstrbutve propertes of the labor taxes. Even when the double dvdend s not possble, the cost of the polluton regulaton can be mnmzed by a new desgnng of the progressvty of the labor tax nstead of an homogenous cut n the labor tax rates. We conclude that the dstrbutve propertes of the tax polcy could be one of the nstruments of nternalzaton of the ntergeneratonal externaltes. To a certan extent, our paper underlnes the gap between economc e cency and vertcal equty and llustrates the problem of the aggregaton of postve and negatve compensatory varatons: the usual way of aggregaton gves a hgher weght to the wealthest classes and ntroduces a bas when assessng the desrablty or the acceptablty of any envronmental tax reform. References [] W.J. Baumol and W.E. Oates, The Theory of Envronmental Polcy, Cambrdge Unversty Press, 2nd edton, (988). 6

17 [2] D.E. Bloom, D. Cannng and J. Sevlla, The E ects of Health on Economc Growth: A Producton Functon Approach, World Development, 32, -3 (2004). [3] F. Bosello, R. Roson and R.S.J. Tol, Economy-wde Estmates of the Implcatons of Clmate Change: Human Health, Ecologcal Economcs, 58, (2006). [4] A.L. Bovenberg and R.A. de Mooj, Envronmental Leves and Dstortonary Taxaton, Amercan Economc Revew, 84 (4), (994). [5] H.-p. Chao and S. Peck, Greenhouse Gas Abatement: How Much? and Who Pays?, Resource and Energy Economcs, 22, -20 (2000). [6] M. Chroleu-Assoulne and M. Fodha, Double Dvdend wth Involuntary Unemployment: E cency and Intergeneratonal Equty, Envronmental and Resource Economcs, 3(4), (2005). [7] M. Chroleu-Assoulne and M. Fodha, Double Dvdend Hypothess, Golden Rule and Welfare Dstrbuton, Journal of Envronmental Economcs and Management, 5(3), (2006). [8] GB. Chrstansen and TH. Ttenberg, Dstrbutonal and Macroeconomc Aspects of Envronmental Polcy, n A Kneese and J. Sweeney, eds. Handbook of Natural Resource and Energy Economcs, Amsterdam, (985). [9] P.A. Damond, Natonal Debt n a Neoclasscal Model, Amercan Economc Revew, 55, (965). [0] DB. Ellott and JC. Mllan, Toward a Theory of Statutory Evoluton: The federalzaton of Envronmental Law, Journal of Law, Economcs, and Organzaton, (985). [] F.M. Gollop and G.P. Swnand, From Total Factor to Total Resource Productvty: An Applcaton to Agrculture, Amercan Journal of Agrcultural Economcs, 80, (998). [2] L.H. Goulder, Envronmental Taxaton and the Double Dvdend : A Reader s Gude, Internatonal Tax and Publc Fnance, 2, (995). [3] D. Jr. Harrson, The Dstrbutve E ects of Economc Instruments for Envronmental Polcy, Pars, OECD, (994). 7

18 [4] M. Hübler, G. Klepper and S. Peterson, Costs of Clmate Change - The E ects of Rsng Temperatures on Health and Productvty, Ecologcal Economcs, 68, (2008). [5] OECD, Costs of Inacton on Key Envronmental Challenges, Pars, (2008). [6] B.D. Ostro, The E ects of Ar Polluton on Work Loss and Morbdty, Journal of Envronmental Economcs and Management, 0, , (983). [7] T. Pervn, U.-G. Gerdtham and C.Hampus Lytkens, Socetal Costs of Ar Polluton- Related Health Hazards: A Revew of Methods and Results, Cost E ectveness and Resource Allocaton, 6 (9), (2008). [8] H. Peskns, Envronmental Polcy and the Dstrbuton of Bene ts and Costs, n R. Portney, ed. Current Issues n U.S. Envronmental Polcy, J. Hopkns Unversty Press for Resources for the Future, (978). [9] N. Ruz and A. Trannoy, Le caractère régressf des taxes ndrectes : les ensegnements d un modèle de mcrosmulaton, Econome et Statstque, 43, 2-46 (2008). [20] E. Samakovls, A. Huhtala, T. Bellander and M. Svartengren, Valung Health Effects of Ar Polluton - Focus on Concentraton-response Functons, Journal of Urban Economcs, 58, (2005). [2] R.C. Wllams III, Envronmental Tax Interactons when Polluton A ects Health or Productvty, Journal of Envronmental Economcs and Management, 44, (2002). [22] R.C. Wllams III,, Health E ects and Optmal Envronmental Taxes, Journal of Publc Economcs, 87(2), (2003). 8