The Effect of the German and UK Environmental Tax Reforms on the Demand for Labour and Energy
The Effect of the German and UK Environmental Tax Reforms on the Demand for Labour and Energy
The objective of ETRs is to improve the environment (for example, by reducing carbon emissions) while reducing other taxes which may have a negative economic effect. Often ETRs also have the objective of increasing employment. The aim of this chapter is to estimate the effect on the demand for energy and the level of unemployment of the UK and German ETRs that have been implemented. In order to do this, we estimate a specification based on a translog cost function which allows us to model the cross-price elasticities among capital, labour, energy, material, and services.
Keywords: environmental tax reform, translog cost function, cross-price elasticities, employment
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