Economic Instruments and Their Revenue Expenditures Toward Green Asia

Asian countries have been facing various environmental problems, ranging from air and water pollution to climate change. At the same time, many people seek higher income and further economic development, which requires more government revenue. This paper introduces carbon pricing, environmental tax, and emissions trading schemes, all schemes that can help achieve the two objectives: environmental conservation and revenue raising. The paper reviews experiences from the implementation of these policy instruments from the perspective of raising revenue and the effectiveness in environmental conservation with focus on Asia. Specifically, the experiences in India, Japan, the Republic of Korea, the People’s Republic of China, and Singapore show that governments can raise revenue while reducing emissions. We conclude our paper with policy implications.