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On the income distributional effects of environmental management policies
Author(s) -
Campbell Harry F.
Publication year - 1976
Publication title -
water resources research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.863
H-Index - 217
eISSN - 1944-7973
pISSN - 0043-1397
DOI - 10.1029/wr012i005p01077
Subject(s) - effluent , context (archaeology) , economics , subsidy , environmental policy , distribution (mathematics) , process (computing) , environmental economics , microeconomics , econometrics , natural resource economics , environmental science , environmental engineering , computer science , mathematics , paleontology , mathematical analysis , market economy , biology , operating system
The paper analyzes the effects of three environmental policy instruments, effluent charges, effluent standards, and effluent treatment subsidies, in the context of a two‐person two‐firm general equilibrium model in which the distribution of income varies with the choice of policy instrument. It is demonstrated that, under reasonable assumptions about the income distribution process and the nature of consumer preferences, each policy instrument corresponds to a different optimal quantity of effluent and a different set of optimal prices. The implication of this result is that consideration of income distributional effects should play an integral part in the formulation of optimal environmental management policies.