Green Tax Reforms: Implications for Welfare and Distribution

This paper explores how environmental tax reforms impact welfare, employment and the distribution of income. It investigates the conditions under which a green tax reform generates a double dividend, i.e. not only a cleaner environment but also non-environmental benefits. It investigates also whether such a double dividend implies some other nonenvironmental costs, e.g. in terms of the income distribution. Finally, the political economy of environmental taxation is discussed.