Optimal green tax reforms yielding double dividend

• We use an endogenous growth model with a negative externality from CO2 emissions. • Abatement activities are made by private firms to reduce payment of emissions taxes. • We find dynamically feasible green tax reforms yielding the double dividend result. • Our result arises thanks to the inclusion of public debt issuing as a financing device. • The type of tax reform proposed can be implemented for other energy taxes.