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There are two potentially important efficiency rationales for alcohol taxes. First, they help to mitigate various external costs of alcohol abuse, such as the risks to others posed by drunk [...], This paper provides a first attempt to estimate the cross-price elasticity between alcoholic beverages and leisure, which is critical for assessing how much alcohol taxation might be warranted on fiscal grounds. We estimate a demand system defined over alcohol, leisure, and other goods, using data from the Consumer Expenditure Survey and other sources. Our results suggest that alcohol is a relative complement for leisure over a range of specifications. This implies that the optimal alcohol tax may substantially exceed the Pigouvian tax, reinforcing the efficiency case for higher taxation. These findings should be viewed as preliminary, however, given data and other limitations.

Although excise taxes on beer, wine, and spirits raise about $15 billion a year in revenue for federal and state governments, current alcohol tax rates in the United States are [...]

The welfare effects of fare adjustments in passenger peak and off-peak rail and bus transit and the optimal pricing of these transport services are studied. Results indicate the efficiency of large fare subsidies for these forms of public transportation and that these subsidies must be maintained.

Recent events suggest that it may only be a matter of time before the federal government enacts a nationwide program to reduce emissions of carbon dioxide (C[O.sub.2]) and other greenhouse [...]

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jue.2006.12.003 Byline: Ian W.H. Parry Keywords: Carbon policies; Passenger vehicles; Externalities; Welfare costs Abstract: Energy models suggest that the costs of reducing carbon emissions from transportation are high relative to those for other sectors. This paper discusses why taxes (or equivalent permit systems) to reduce passenger vehicle emissions produce large net benefits, rather than costs, when account is taken of (a) their impact on reducing other highway externalities besides carbon and (b) interactions with the broader fiscal system. Both of these considerations also strengthen the case for a tax-based approach over fuel economy regulation, while fiscal considerations strengthen the case for taxes over grandfathered emissions permits. The paper also comments on the practical relevance of automobile fuel taxes, or their policy equivalents, to broader legislation intended to mitigate climate change. Author Affiliation: Resources for the Future, 1616 P Street NW, Washington, DC 20036, USA Article History: Received 27 February 2006; Revised 7 December 2006

I quantify the costs of controlling S[O.sub.2], carbon, and N[O.sub.x] emissions from power generation, accounting for interactions between environmental policies and the broader fiscal system. I distinguish a dirty technology [...]

With OPEC pumping petroleum at near apacity, and both China and India threatening to join the ranks of world-class oil guzzlers, the idea of raising gasoline taxes to encourage fuel [...]

Theory and Practice of Excise Taxation: Smoking, Drinking, Gambling, Polluting, and Driving. Edited by SIJBREN CNOSSEN. Oxford: Oxford University Press, 2005, pp. 255. INTRODUCTION This book provides an interesting collection [...]

The welfare costs of growing subsidies for public and private health care in the U.K. are compared employing a calibrated analytical model. The rationing, subsidies, distortionary taxes and others are discussed.

The pay-as-you-drive insurance model where auto insurance companies levy premiums based on annual miles driven and scaled by a driver's rating factor is shown to reduce gasoline demand by 11.4 billion gallons. This model could also increases social welfare by $19.3 billion per year. This is seen as a better alternative to higher gas taxes in reducing demand for gasoline.

Income is redistributed to wealthy households by the grandfathered emissions by creating firm rents that ultimately accrue to shareholders. The social costs of policies that differ from efficiency costs when society has aversion to inequality is also discussed.

The topics that are currently on the agendas of policy makers that illustrate the role of economic analysis in illuminating current debates are discussed. It is observed that social costs of additional driving could be as large as the beneficial effects of Corporate Average Fuel Economy (CAFE).

The welfare effects of emission taxes, auctioned emission permits and free permits are studied. The types of situations when there can be significant welfare discrepancies between the policies and when there are not are examined.

The welfare gains resulting from technological innovations required by changes in environmental policies will be greater if the abatement costs are lowered quickly and the abatement level necessary is low.

Economists have long advocated using the market to achieve environmental objectives. Possible policies include taxes on waste emissions and programs through which the government limits pollution by issuing emission permits […]

Byline: Ian W. H. Parry (1) Keywords: externalities; subsidies; pre-existing taxes; welfare impacts Abstract: This paper examines the complications posed by pre-existing tax distortions in the economy, for the evaluation of a variety of subsidy policies that affect the environment. These complications include not only the efficiency cost of financing the subsidy by distortionary taxation, but also the interaction effects between the subsidized market and markets with pre-existing taxes. Studies that ignore both of these effects, or only incorporate the first type of effect, can be highly misleading. Author Affiliation: (1) Resources for the Future, 1616 P Street NW, Washington, DC, 20036 Article History: Registration Date: 30/09/2004

A study was conducted to determine the optimal pollution tax in a regime of endogenous innovation under a patent system. The results show that the optimal pollution tax will exceed marginal environmental damages only in a monopoly and when patents are too weak to protect against copying. Otherwise, monopoly pricing by the patent holder, excess of patent holder revenue over social benefits from innovation due to convex environmental damages and the common pool effect of research render the optimal tax lower than the marginal environmental damages.

The value of reduced risk from marginal reductions in present greenhouse gas emissions are estimated using the cost/benefit approach developed by Nordhaus. Results indicate that the insurance value from lowering current greenhouse gases emissions is insignificant, relative to the cost, since the consumption variability from the possibility of climate change is rather far into the future and usually not big enough relative to total consumption. The insurance value becomes significant only under extreme conditions or when future utility is discounted at an unusually low rate.

The United Kingdom's taxation policy is discussed with emphasis on the high level of its fuel tax. The effectiveness of the tax, which is set at a level to cover congestion and pollution costs and provide money for social policies, is examined .

The recycling of revenues from environmental taxes can bring greater efficiency gains due to distortions from pre-existing income taxes. A double dividend can be achieved from a revenue-neutral tax on emissions.