In response to anthropogenic climate change, developed countries have committed themselves to raise 100 billion USD a year from 2020 onwards for addressing the needs of developing countries. In this paper, we investigate the economic and CO2 emission impacts of four alternative options for...

Carbon pricing policies worldwide are increasingly coupled with direct or indirect subsidies where emissions pricing revenues are rebated to the regulated entities. This paper analyzes the incentives created by two novel forms of rebating that reward additional emission intensity reductions: one...

In a dynamic, three-region environmental multi-sector general equilibrium model (called EMuSe), we find that carbon pricing generates a recession initially as production costs rise. Benefits from lower emissions damage materialize only in the medium to long run. A border adjustment mechanism...

We study the implications of climate change and the associated mitigation measures for optimal monetary policy in a canonical New Keynesian model with climate externalities. Provided they are set at their socially optimal level, carbon taxes pose no trade-offs for monetary policy: it is both...

This paper explores the global economic and climate spillovers of the European Union Emissions Trading System (EU ETS), leveraging exogenous variations in carbon prices identified through a carbon policy surprise series. Findings reveal that higher EU carbon prices lead to significant and...

In a dynamic, three-region environmental multi-sector general equilibrium model (called EMuSe), we find that carbon pricing generates a recession initially as production costs rise. Benefits from lower emissions damage materialize only in the medium to long run. A border adjustment mechanism...

We explore the role of public subsidies in mitigating the transition risk associated with a climate-neutral objective by 2060. We develop and estimate an environmental dynamic stochastic general equilibrium model for the world economy featuring an endogenous market structure for green products....

We develop a dynamic regulation game for a stock externality under asymmetric information and future market uncertainty. Within this framework, regulation is characterized as the implementation of a welfare-maximization program conditional on informational constraints. We identify the most...

This paper provides a comprehensive evaluation of the world’s largest environmental tax reform. We compare carbon and air pollutant emissions of the German transport sector and synthetic counterfactuals following the 1999 eco-tax reform, and find average reductions in external damages of...