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http://hdl.handle.net/10419/57268
  
Title:Unilateral reduction of medium-term carbon emissions via taxing emissions and consumption PDF Logo
Authors:Eichner, Thomas
Pethig, Rüdiger
Issue Date:2011
Series/Report no.:Volkswirtschaftliche Diskussionsbeiträge, Universität Siegen, Fakultät III: Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht 152-11
Abstract:Internalizing the global negative externality of carbon emissions requires flattening the extraction path of non-renewable fossil-fuel resources (= world carbon emissions). Following Eichner and Pethig (2011b) we set up a two-country two-period model in which one of the countries represents a sub-global climate coalition that implements a binding ceiling on the world's first-period emissions. The other country is the rest of the world and refrains from taking action. The climate coalition has at its disposal sign-unconstrained taxes on emissions in both periods, as in Eichner and Pethig (2011b), but in the present study it has the additional option of taxing consumption. The central question is whether and how the coalition makes use of consumption taxes along with emission taxes in its unilateral cost-effective ceiling policy. We identify cost-effective policies under various conditions and find that all consist of a (positive) tax on first-period consumption and of emission taxes whose rates are negative in the second period but may take on either sign in the first period.
Subjects:carbon emissions
ceiling
unilateral
cost-effective regulation
JEL:H21
H23
Q54
Q58
Document Type:Working Paper
Appears in Collections:Volkswirtschaftliche Diskussionsbeiträge, Universität Siegen

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