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Tourism and the environment
chapterposted on 2011-12-01, 00:00 authored by H Beladi, Chi-Chur Chao, B R Hazari, J P Laffargue
This chapter examines the effects of pollution taxes on welfare and environment for a small open economy. In the presence of tourism, pollution taxes provide a double dividend of less pollution and improvements in the tourism terms of trade. The optimal pollution taxes are derived under exogenous and endogenous tourism, and they can be greater or less than the marginal damage of pollution perceived by the domestic residents. Numerical simulations show that the optimal tax rate is larger under exogenous tourism. © 2011 Nova Science Publishers, Inc.