Voting on Prices vs. Voting on Quantities in a World Climate Assembly

Martin Weitzman

No 20925, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper posits the conceptually useful allegory of a futuristic "World Climate Assembly" that votes on global carbon emissions via the basic principle of majority rule. Two variants are considered. One is to vote on a universal price (or tax) that is internationally harmonized, but the proceeds from which are domestically retained. The other is to vote on the overall quantity of total worldwide emissions, which are then distributed for free (via a pre-decided fractional subdivision formula) as individual allowance permits that are subsequently marketed in an international cap-and-trade system. The model of the paper suggests that the majority-voted price is likely to be less distortionary and easier to enact than the majority-voted total quantity of permits. While the study is centered on a formal model, the tone of the policy discussion resembles more an exploratory think piece.

JEL-codes: F51 H41 Q54 (search for similar items in EconPapers)
Date: 2015-02
New Economics Papers: this item is included in nep-cta, nep-ene, nep-env, nep-pol and nep-res
Note: EEE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published as Martin L. Weitzman, 2016. "Voting on Prices vs. Voting on Quantities in a World Climate Assembly," Research in Economics, .

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Journal Article: Voting on prices vs. voting on quantities in a World Climate Assembly (2017)
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