Environmental economists have in general paid little or no attention to the political context within which green taxation would be introduced. In order to understand the real-life politics of green taxation, it is necessary to establish which political constraints determine the actual design of green taxes. Daugbjerg and Svendsen identify rent-seeking, party politics, and policy networks as the three main constraints in environmental regulation. This analysis forms the basis of policy recommendations on the future design of green taxation and international permit trading. Even though these policy recommendations are second best in strict economic terms, they are the best economic designs given that they must be politically feasible.
CARSTEN DAUGBJERG is Associate Professor at the Department of Political Science, Aarhus University, Denmark. He is the author of Policy Networks under Pressure: Pollution Control, Policy Reform and the Power of Farmers and he has published several articles in Scandinavian and international journals. - GERT TINGGAARD SVENDSEN is Associate Professor at the Department of Economics, The Aarhus School of Business. He is the author of Public Choice and Environmental Regulation: Tradable Permit Systems in United States and CO? Taxation in Europe and of numerous articles in leading international and Scandinavian journals.