This paper addresses optimal taxation, when the relationship between consumption and environmental damage is uncertain and treated as a random variable by policy makers. The main purpose is to analyze how additional uncertainty about this relationship affects the optimal unit tax on the...

We investigate how carbon taxes combined with output-based rebating (OBR) in an open economy perform in interaction with the carbon policies of a large neighboring trading partner. Analytical results suggest that whether the purpose of the OBR policy is to compensate firms for carbon tax burdens...

This paper concerns international coordination of environmental taxation. The main contribution of the paper is to provide a frame-work for dynamic cost benefit analysis of environmental tax reforms in a global economy with transboundary environmental problems. We show that the welfare effects...