Environmental Abatement and Intergenerational Distribution

A.L. Bovenberg, B.J. Heijdra

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Abstract

This paper employs an overlapping generations model to explore the impact of public abatement on private investment and the intergenerational distribution of welfare. Whereas public abatement benefits old generations in terms of non-environmental welfare, future generations gain most in terms of environmental welfare. The overall benefits tend to be smallest for generations born at the time of the unanticipated policy shock. Public debt policy, however, can be employed to ensure that welfare gains are distributed more equally across the various generations. Such a policy implies that natural capital crowds out man-made capital.
Original languageEnglish
Place of PublicationTilburg
PublisherMacroeconomics
Number of pages44
Volume1998-100
Publication statusPublished - 1998

Publication series

NameCentER Discussion Paper
Volume1998-100

Keywords

  • overlapping generations
  • public environmental abatement
  • intergenerational welfare effects
  • debt policy

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    Bovenberg, A. L., & Heijdra, B. J. (1998). Environmental Abatement and Intergenerational Distribution. (CentER Discussion Paper; Vol. 1998-100). Macroeconomics.