Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/107391
Authors: 
Habermacher, Florian
Year of Publication: 
2015
Series/Report no.: 
CESifo Working Paper 5216
Abstract: 
Future market developments determine the fate of fossil fuel carbon currently conserved unilaterally. Dynamic fuel depletion naturally suggests leakage rates approaching 100%. Reasons for lower leakage differ from what limits rates in previous studies. Discounting reduces present-value leakage as global emissions are delayed. Containing climate change requires future global political or technological breakthroughs to conserve some carbon forever. Early breakthroughs limit leakage but with late breakthroughs most unilateral emission reductions may be negated abroad. Future coal liquefaction suggests negative leakage rates for current mitigation, but a perfect backstop allows leakage above unity. Leakage rates and suggested taxes vary across fuels.
Subjects: 
unilateral climate policy
emission impulse response
fossil fuel depletion
dynamic carbon leakage
discounting
fuel specific carbon tax
coal liquefaction
backstop
OECD
JEL: 
Q54
Q41
H23
H21
Document Type: 
Working Paper

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