Keywords: developing countries, financial transfer, technological transfer, OECD, carbon tax, revenue-, neutral policy, sustainable development, sustainability, environmental improvement, environmental pollution, carbon emissions
Global economic repercussions of a Pigouvian tax: who bears the brunt?
The global interdependency in trade, finance and environmental issues should prompt both the OECD and non-OECD countries to engage in more dialogue. The application of a carbon tax could lead to changes in macroeconomic behaviour in OECD countries, which will impact upon trading patterns. Environmental improvements in developing countries are costly, but can be undertaken effectively in an environment of growth and prosperity. The implementation of unilateral environmental packages is not likely to be efficient in tackling global problems. Resources should rather be diverted to developing countries, where returns for reductions in harmful emissions and pollution levels are much higher per dollar invested.