Reconsidering Carbon Equivalence: Comparisons of GWP Time Horizon Choice Under a Global Carbon Tax

Mary Kate Batistich

No 332786, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: This study explores the importance of carbon equivalence metric choice in determining the distributional effects of a global carbon tax by comparing the enforcement of the same tax under two different metrics: the 100-year GWP, which is the current industry standard, and the 20-year GWP, which is a reasonable alternative. Under a computable general equilibrium framework, simulations of a $27/tCO2e uniform, global tax indicate that many regions are made worse off by the 20-year GWP, generally because the metric more than doubles the importance of methane emissions. Regions with relatively low emissions intensities, particularly in methane-reliant sectors, benefit from the 20-year GWP. There are greater emissions reductions in both methane gas and nitrous oxide under the 20-year GWP.

Keywords: Resource/Energy; Economics; and; Policy (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:332786

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