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Environmental Protection in the Presence of Unemployment and Common Resources
Author(s) -
Abe Kenzo,
Saito Muneyuki
Publication year - 2016
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/rode.12197
Subject(s) - unemployment , economics , welfare , environmental quality , resource (disambiguation) , quality (philosophy) , labour economics , afforestation , natural resource economics , macroeconomics , market economy , environmental science , computer network , philosophy , epistemology , political science , computer science , law , agroforestry
This paper examines the effects of an export tax (on a processed resource good), the number of harvesters and an afforestation policy in a small, open economy with urban unemployment. The export tax increases the urban unemployment rate, but improves the quality of the environment. Here, the optimal export tax is lower than the adjusted marginal environmental damage. Reducing the number of harvesters has a similar resource allocation effect to that of an export tax. However, the afforestation policy can resolve the trade‐off between urban unemployment and the quality of the environment and may also improve the welfare of a country.