A proposal to correct external effects in the coffee market: A tax on regular coffee and tea to subsidise the fair trade coffee
Keywords:Coffee market, Fair trade
AbstractThis paper justifies the need to introduce a tax on regular coffee drinkers in the UK to subsidise the fair trade/organic coffee production. This policy will allow to take full account of the negative external effect of regular coffee production while internalising the positive effect of fair trade initiatives. Designing such a policy is possible and the benefits of it can be calculated. This paper shows how.
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