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The objective of this paper is to critically assess the use of simple rules for the social cost of carbon (SCC) that employ a rudimentary form of the Ramsey Rule. Two interrelated caveats apply. First, if climate change poses a serious problem, it is hard to justify an exogenous constant growth...
Persistent link: https://www.econbiz.de/10012892228
The social cost of carbon is the central economic measure for aggregate climate change damages and functions as a metric for optimal carbon prices. Previous literature shows that inequality significantly influences the level of the social cost of carbon, but mostly neglects a major source of...
Persistent link: https://www.econbiz.de/10012870643
For any emission trading system (ETS) with quantity-based endogenous supply of allowances, there exists a negative demand shock, e.g. induced by abatement policy, that increases aggregate supply and thus cumulative emissions. We prove this green paradox for a general model and then apply it to...
Persistent link: https://www.econbiz.de/10012861409
, ultimately increasing world emissions. We establish testable conditions as to whether a unilateral tax on domestic CO2 emissions … strategy’s implications for climate policy in the rest of the world. Finally, we present an illustrative application of our …
Persistent link: https://www.econbiz.de/10013315249
In June 2018, an agreement between key EU institutions – the Commission, the European Parliament, and the European Council – was reached after a long-lasting discourse over the 2030 EU climate and energy policy package. This paper offers a comprehensive assessment of the EU package, with its...
Persistent link: https://www.econbiz.de/10012892222
emission certificate regulation, and we consider the impact of changes in EU climate policy on the rest of the world as well as …
Persistent link: https://www.econbiz.de/10013235113
region of the world imposes a climate policy and the rest of the world is passive. We solve the model analytically and also …
Persistent link: https://www.econbiz.de/10014079652
A two-tier climate club exploits the comparative advantage of large countries to mete out punishments through trade, while taking their capacity to resist punishment as a constraint. Countries outside the coalition price carbon at a fixed fraction of the average carbon price adopted within the...
Persistent link: https://www.econbiz.de/10014081042
We analyse optimal abatement and carbon pricing strategies under a variety of economic, temperature and damage risks. Economic growth, convex damages and temperature-dependent risks of climatic tipping points lead to higher growth rates of carbon prices, but gradual resolution of uncertainty...
Persistent link: https://www.econbiz.de/10013226653
I build a quantitative model of economic growth that can be used to evaluate the impact of environmental policy interventions on final-use energy consumption, an important driver of carbon emissions. In the model, energy demand is driven by directed technical change. Energy supply is subject to...
Persistent link: https://www.econbiz.de/10013300865