Complementary Taxation of Carbon Emissions and Local Air Pollution

Mathias Mier, Jacqueline Adelowo and Christoph Weissbart

No 375, ifo Working Paper Series from ifo Institute - Leibniz Institute for Economic Research at the University of Munich

Abstract: 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 billion € and fosters nuclear deployment. Taxing only carbon yields social cost of 716 billion € and promotes CCS deployment. Taxing both yields cost of 1,118 billion €. Moderate carbon taxation can be complementary to a primary policy of air pollution abatement. On the contrary, a primary policy of decarbonization stands in trade-off with air pollution abatement in the long-term.

Keywords: Taxation; social cost; air pollution; carbon emission; externality; energy system model; power market model; decarbonization (search for similar items in EconPapers)
JEL-codes: C61 H21 H23 H43 L94 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-ene, nep-env and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.ifo.de/DocDL/wp-2022-375-mier-adelowo-weissbart-air-pollution.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ifowps:_375

Access Statistics for this paper

More papers in ifo Working Paper Series from ifo Institute - Leibniz Institute for Economic Research at the University of Munich Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().