Environmental Tax Reform and the Double Dividend: A Meta-Analytical Performance Assessment

27 Pages Posted: 13 Dec 2002 Last revised: 1 Jul 2014

See all articles by Roberto Patuelli

Roberto Patuelli

University of Bologna - Department of Economics

Peter Nijkamp

VU University of Amsterdam - Department of Spatial Economics; Tinbergen Institute

Eric A. J. H. Pels

Vrije Universiteit - Department of Spatial Economic

Date Written: March 29, 2004

Abstract

In this paper, we offer a meta-analytical synthesis of recent (simulation) studies on environmental tax reform (ETR). The studies considered here look at both environmental effects (e.g., reduction in CO2 emission) and economic effects (e.g. employment gains) consequent upon such a tax reform. The existing statistical results from the literature mainly suggest that the tax type, the recycling policy and the economic model used in the simulations significantly influence the chance that a ‘double dividend’ effect can be obtained. These empirical results are, however, not entirely conclusive regarding the question of which combination of policies and models will lead to a higher double dividend. This issue is investigated in our study by a quantitative meta-analytic approach. Our meta-analytic statistical experiment demonstrates that the total effect of a tax-and-recycle policy has a significant influence on the economic variables (second dividend), when employment is used. It is also shown that different definitions of the double dividend contribute in determining the success of ETR, in particular since the effects on GDP are less clear than for employment. These findings should be taken into consideration when deploying an ETR in a policy context, in order to prevent a situation where ETR is rejected or accepted solely due to characteristics of one simulation study rather than through a wide set of results from different studies.

Keywords: environmental tax reform, double dividend, meta analysis

JEL Classification: H20, Q48

Suggested Citation

Patuelli, Roberto and Nijkamp, Peter and Pels, Eric A.J.H., Environmental Tax Reform and the Double Dividend: A Meta-Analytical Performance Assessment (March 29, 2004). Ecological Economics, Vol. 55, No. 4, 2005, Available at SSRN: https://ssrn.com/abstract=335720 or http://dx.doi.org/10.2139/ssrn.335720

Roberto Patuelli (Contact Author)

University of Bologna - Department of Economics ( email )

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Peter Nijkamp

VU University of Amsterdam - Department of Spatial Economics ( email )

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1081HV Amsterdam
Netherlands
+31 20 4446091 (Phone)
+31 20 4445611 (Fax)

Tinbergen Institute

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Amsterdam, 1082 MS
Netherlands

Eric A.J.H. Pels

Vrije Universiteit - Department of Spatial Economic ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands
+31-20-4446049 (Phone)
+31-20-4446004 (Fax)

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