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BC3 Seminars: Vertical Fiscal Externalities and the Environment

November 27, 2014 @ 12:00 am - 1:00 pm

BC3 Seminars
Vertical Fiscal Externalities and the Environment

Prof. Dr. Christoph Böhringer

Chair of Economic Policy Department of Economics, University of Oldenburg


We show that imposition of a state-level environmental tax in a federation crowds out preexisting federal taxes. We explain how this vertical fiscal externality can lead unilateral state-level environmental policy to generate a welfare gain in the implementing state, at the expense of other states. Using a computable general equilibrium model of the Canadian federation, we show that vertical fiscal externalities can be the major determinant of the welfare change following environmental policy implementation by a state government. Our numerical simulations indicate that – as a consequence of vertical fiscal externalities – state governments can reduce greenhouse gas emissions by over 20 percent without any net cost to themselves.


Prof. Sanjay Sharma
Dean and Professor of Management, Grossman School of Business, University of Vermont, USA

Dr. Sanjay Sharma is the Dean of the Grossman School of Business at University of Vermont. Prior to Vermont, he was the Dean of the John Molson School of Business in Montreal and the Canada Research Chair in Organizational Sustainability. His expertise is in the area of helping organizations develop internal motivations and the capacity to reconcile their economic, social and environmental performance and generate competitive advantage via sustainable business models in developed and developing nation contexts. He is a pioneer in research on corporate sustainability and he has published eight books and over 60 articles on this topic. His publications are in journals such as Academy of Management review, Academy of Management Journal, Strategic Management Journal, Journal of Marketing, and Academy of Management Executive. His latest book “Competing for a Sustainable World” was a runner up for the Best book award at the Academy of Management in 2015 and he was awarded the “Distinguished Scholar Lifetime Achievement Award” by the Organizations and the Natural Environment Division of the Academy of Management in 2016. Before pursuing an academic career, Sanjay was a senior manager and CEO with multinational corporations for 16 years.

Lecturer´s personal webpage


Referenced papers

  • Sharma, S. 2014. Competing for a Sustainable World: Building Capacity for Sustainable Innovation. Greenleaf Publishing, UK. ISBN: 13:978-1-78353-224-7
  • Sharma, S. 2002. “What really matters: Research on corporate sustainability.” In Sharma, S. & Starik, M. (eds.) Research in Corporate Sustainability: The Evolving Theory and Practice of Organizations in the Natural Environment: 1-29.. Edward Elgar Academic Publishing, Northhampton, MA.

27th November 2014, 12:00-13:00, BC3 offices 

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November 27, 2014
12:00 am - 1:00 pm
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BC3-Basque Centre for Climate Change
Sede Building 1, 1st floor, Scientific Park of the University of the Basque Country
+34 944 014 690
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