Effects of Environmental Taxes under Duopolistic Market—In the Framework of Stackelberg Game

Abstract

This paper analyze the impacts of environmental taxes on environmental quality, economic growth as well as social welfare. The study shows that: environmental tax reforms cannot lead to “economic growth double dividend†effects under any circumstances; the optimal environmental tax can be negative under some technology distribution and the implementation of environmental tax reforms will not inevitably lead to the improvement of environmental quality; and the environmental effects of ETR depend on the environmental awareness of the government.