Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/30531 
Year of Publication: 
2009
Series/Report no.: 
CESifo Working Paper No. 2807
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We propose a development-compatible refunding system designed to mitigate climate change. Industrial countries pay an initial fee into a global fund. Each country chooses its national carbon tax. Part of the global fund is refunded to developing and industrial countries, in proportion to the relative emission reductions they achieve. Countries receive refunds net of tax revenues. We show that such a scheme can simultaneously achieve efficient emission reductions and equity objectives, as developing countries abate voluntarily, do not have to pay an initial fee, and are net receivers of funds. Moreover, we explore the potential of simple refunding schemes that do not claim tax revenues and only rely on initial fees paid by industrial countries.
Subjects: 
climate change mitigation
refunding scheme
international agreements
developing countries
JEL: 
H23
Q54
H41
O10
O13
Document Type: 
Working Paper
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