Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171697
Authors: 
Riekhof, Marie-Catherine
Bröcker, Johannes
Year of Publication: 
2016
Series/Report no.: 
Economics Working Paper Series 16/254
Abstract: 
We consider a carbon emissions tax announced today, but implemented after a known time-lag. Before implementation, the announcement induces higher emissions than without intervention. In welfare terms, this adverse announcement effect could more than outweigh the gain after tax implementation. We quantify a ‘critical lag’ such that a shorter (longer) implementation lag is a welfare gain (loss) over nointervention. We identify resource scarcity as the main driver for a short critical lag. The model is a global Ramsey Model extended by an exhaustible carbon resource and linked to a climate model.
Subjects: 
Climate Policy
Announcement Effect
Dynamic General Equilibrium
Non-renewable Resource
Backstop
Green Paradox
Welfare Evaluation
JEL: 
E21
E32
F44
G21
G28
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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