Effizienz und politische Durchsetzbarkeit: Die Verwendung der Einnahmen einer C02-Abgabe in der Schweiz

In this contribution we propose to use revenues from environmental taxes within each sector to reduce wage taxes. Such a recycling scheme enhances the political feasibility of environmental taxes since no inter-sectoral transfers take place. Furthermore, we show that this proposal will lessen the distortion of efficiency in production compared to a sectoral differentiation of energy taxes. This result holds provided the cost share for energy in all sectors is smaller than for labor.