Household Fuels Use and Related Environmental Policy options (A Case Study of Iran)
Subject Areas : Financial EconomicsJamshid Pajooyan 1 , Marjan Damankeshide 2
1 - Full Professor of Economics (Ph.D), Islamic Azad University, Science and research Branch
2 - Graduated (Ph.D) of IAU Tehran Science and Research Branch
Keywords: Green tax, environment, Rotterdam demand system, Household fuels,
Abstract :
Environmental taxes, so called Pigouian or Green tax, are considered as a policy instrument to control pollution. Green taxes are a sort of levies on expenditure and used by government as a fiscal policy tool to prevent pollution activities of any economic agents .in contrast to direct and indirect taxes, Green tax has more advantages, for it can provide revenue for government and also can mitigate the negative effect of externalities. As such it renders a two-sided effect on efficiency ground. Towards this ends, the Rotterdam demand system was applied to this study. The findings of this paper indicate that the adoption of green tax policy would encourage the household to substitute other sources of clean energy for fuels use (oil and gas) and hence contribute to environment protection.