Disability insurance and environmental tax policy in a zero net emissions society

ABSTRACT

This study aims to show the importance of disability insurance from an environmental policy perspective. Within the framework of an overlapping generations model, we derive the emissions tax rate required to achieve zero net pollution. Our model implies that the emissions tax rate is always lower in the presence of disability insurance than it is in the absence of disability insurance. The results suggest that disability insurance can be used as an instrument for increasing gross domestic product performance when the government implements a zero net emissions policy.

KEYWORDS:

• Disability insurance
• kindergarten rule
• pollution abatement
• productivity difference
• zero net emissions policy

JEL CLASSIFICATION:

• Q58
• O41

Acknowledgments

The author gratefully acknowledges an anonymous reviewer for valuable comments and suggestions. This research was financially supported by the Japan Institute of Life Insurance.

Disclosure statement

No potential conflict of interest was reported by the author.

Additional information

Funding

This work was supported by the Research grant by the Japan Institute of Life Insurance [2018-5].