Is the Environment a Luxury? An Inquiry into the Relationship Between Environment and Income

About this book

The purpose of this collection of essays is to shed some light on the complex relationship between environmental quality and the distribution of income. Are the preferences of the poor towards a cleaner environment really different from those of the rich? Environmental economists have traditionally focused on efficiency issues. In their analyses the quality of the environment is usually related to aggregate or average variables, like per capita income; policy recommendations are usually formulated considering efficiency with no regard for equity and also the predicted effects of policies are evaluated in aggregate terms. The essays collected in Is the Environment a Luxury? go into the problem of the relationship between environmental quality and income distribution.

Is the Environment a Luxury?'s opening essay shows how different theories of economic growth and environmental quality seem to suggest that the higher the level of income the higher is the value of environmental protection. The essays that follow, a mix of already published papers and of papers solicited for Is the Environment a Luxury?, analyse the relationship between environmental quality and income distribution from different perspectives (both micro and macro) and on the basis of more than one methodology. Is the Environment a Luxury? highlights that the preferences of the poor towards a cleaner environment may differ from those of the rich, but income is also very likely to represent only one factor affecting them. The essays consider other relevant factors affecting preferences for environmental quality. What clearly emerges is that the distribution of costs and benefits of environmental policies is the key for their successful implementation, and that further research is needed to both address the distributional effects themselves and the strategies to mitigate them.

Contents

Preface
1. Introduction

Part I: Income and environmental quality - Theory and Empirics
2. Willingness to Pay for Environmental Quality
3. The Income Elasticity of the Impact of Climate Change

Part II: The Distributional Incidence of Benefits of Environmental Improvements
4. Environmental Goods and the Distribution of Income Environment and Resource Economics
5. How Much do we Care about Air Quality Improvements? Evidence from Italian Households

Part III: The Distributional Incidence of the Costs of Environmental Policies: the case of carbon/energy taxes
6. Household level studies on the distributional impact of carbon/energy taxes
7. Firm level studies on the distributional impact of carbon/energy taxes
8. Distributional Effects of Carbon Pricing in Ireland: a CGE approach

Part IV: The Role of Fairness and Distributional Weights in Environmental Public goods Provision
9. Distributional Weights in Cost-Benefit Analysis. Should we forget about them?
10. Fair Air: Distributive Justice and Environmental Economics

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Biography

Silvia Tiezzi is Assistant Professor of Economics at the University of Siena, Italy. Chiara Martini is Assistant Professor of Economic Policy at Roma Tre University, Italy.