Borrowing green: Economic and environmental effects of green fiscal policy in The Netherlands

B. Scholtens*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

This paper analyzes the economic and environmental impact of a policy instrument that is related to the tax deductibility of interest returns and dividend yields from specified 'green' projects. We investigate this so-called 'Green Project Facility' (Regeling Groenprojecten) in the Netherlands during 1995-1999. We analyze the effect on tax income, economic growth, employment, as well as on the emission of a number of gases and on solid waste production. We find that the economic effects in general are positive. This policy instrument increases growth, employment, and net tax income. However, the environmental effects are quite mixed. This especially results from the fact that a lot of projects would have been undertaken anyhow. Furthermore, we find that this green fiscal policy instrument is skewed towards energy and building. It appears to neglect environmental problems with consumer households, industry, and transport.

Original languageEnglish
Pages (from-to)425-435
Number of pages11
JournalEcological Economics
Volume39
Issue number3
DOIs
Publication statusPublished - 2001

Keywords

  • Banks
  • Economic effects
  • Environmental effects
  • Financial markets
  • Fiscal policy
  • Investment funds

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