Cumulative Emissions, Unburnable Fossil Fuel and the Optimal Carbon Tax

Armon Rezai and Frederick (Rick) van der Ploeg

No CE3S-07/15, CEEES Paper Series from European University at St. Petersburg, Department of Economics

Abstract: A new IAM is used to calculate the optimal tradeoff between, on the one hand, locking up fossil fuel and curbing global warming, and, on the other hand, sacrificing consumption now and in the near future. This IAM uses the Oxford carbon cycle, which differs from DICE, FUND and PAGE in that cumulative emissions are the key driving force of changes in temperature. We highlight how time impatience, intergenerational inequality aversion and expected trend growth affect the time paths of the optimal global carbon tax and the optimal amount of fossil fuel reserves to leave untapped. We also compare these with the adverse and deleterious global warming trajectories that occur if no policy actions are taken.

Keywords: unburnable fossil fuel; cumulative emissions; optimal carbon tax; Oxford carbon cycle; trend growth; intergenerational inequality aversion; time impatience (search for similar items in EconPapers)
JEL-codes: H21 Q51 Q54 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2015-11-19
New Economics Papers: this item is included in nep-ene, nep-env and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Cumulative emissions, unburnable fossil fuel, and the optimal carbon tax (2017)
Working Paper: Cumulative Emissions,Unburnable Fossil Fuel and the Optimal Carbon Tax (2016)
Working Paper: Cumulative Emissions, Unburnable Fossil Fuel and the Optimal Carbon Tax (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:eus:ce3swp:0715

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