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Is taxing waste a waste of time? Evidence from a Supreme Court decision

Carattini, Stefano and Baranzini, Andrea and Lalive, Rafael (2018) Is taxing waste a waste of time? Evidence from a Supreme Court decision. Ecological Economics, 148. pp. 131-151. ISSN 0921-8009

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Identification Number: 10.1016/j.ecolecon.2018.02.001

Abstract

Environmental taxes are often underexploited. This paper analyses the effectiveness of a garbage tax, assessing its effects on multiple outcomes as well as its acceptability. We study how a Supreme Court decision, mandating the Swiss Canton of Vaud to implement a tax on garbage, affects garbage production and beliefs about the tax. We adopt a difference-in-differences approach exploiting that parts of Vaud already implemented a garbage tax before the mandate. Pricing garbage by the bag (PGB) is highly effective, reducing unsorted garbage by 40%, increasing recycling of aluminium and organic waste, without causing negative spillovers on adjacent regions. The effects of PGB seem very persistent over time. Our assessment of PGB looks very favourable. It may surprise that PGB is not implemented more often. Hence, we look at people's perceptions. We find that people are very concerned with PGB ex ante. Public opposition seems to be the main obstacle to PGB. However, implementing PGB reduces concerns with effectiveness and fairness substantially. After implementing PGB, people accept 70% higher garbage taxes compared to before PGB. We argue that environmental taxes could be much more diffused, if people had the chance to experience their functioning and correct their beliefs.

Item Type: Article
Official URL: https://www.journals.elsevier.com/ecological-econo...
Additional Information: © 2018 The Authors © CC BY-NC-ND 4.0
Subjects: G Geography. Anthropology. Recreation > GE Environmental Sciences
H Social Sciences > HC Economic History and Conditions
JEL classification: D - Microeconomics > D6 - Welfare Economics > D62 - Externalities
D - Microeconomics > D7 - Analysis of Collective Decision-Making > D78 - Positive Analysis of Policy-Making and Implementation
H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H23 - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q53 - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
Sets: Research centres and groups > Grantham Research Institute on Climate Change and the Environment
Collections > Economists Online
Date Deposited: 13 Jun 2018 08:57
Last Modified: 13 Jun 2018 09:22
Projects: P2SKP1_165028
Funders: Swiss National Science Foundation
URI: http://eprints.lse.ac.uk/id/eprint/88337

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