Current decarbonization policies neglect damages from local air pollutants. We analyze the trade-off between complementary taxation of carbon emissions and local air pollution. We quantify results for the European power market until 2050. Taxing only air pollution results in social cost of 5,890...

I estimate the level of emissions cost pass-through to hourly wholesale electricity prices in Germany, based on spot market data. I control for contemporaneous shocks to demand and supply by constructing a detailed supply curve for fossil generation, and intersecting it with residual demand for...

This paper calculates, for the top twenty emitting countries, how much pricing of carbon dioxide (CO2) emissions is in their own national interests due to domestic co-benefits. On average, nationally efficient prices are substantial, $ 57.5 per ton of CO2 (for year 2010), reflecting primarily...

The efficiency effects of carbon pricing depend on how it impacts distortions in fossil fuel markets, most notably from local air pollution externalities. By offsetting these distortions, carbon pricing may generate significant net economic benefits, so it is in countries own interests to...