Citizen Carbon Fund: Harmonized International Carbon Taxes and Transfers to Increase Treaty Size

Anna Klis and Matthew McGinty

The B.E. Journal of Economic Analysis & Policy, 2022, vol. 22, issue 2, 269-280

Abstract: A uniform carbon tax and Citizen Carbon Fund are proposed as a zero-sum system of transfers that can increase equilibrium participation and result in a positive carbon check for each citizen covered by the agreement. The carbon tax results in efficient abatement, generates tax revenue and finances transfers that increase equilibrium participation in a climate agreement. A single carbon price is easier to negotiate than many different abatement requirements, but mirrors the results of a cap-and-trade agreement. An example using the four largest carbon emitters illustrates the set of stable agreements, the transfers required for stability and the resulting carbon checks.

Keywords: IEAs; public goods; stable coalitions; climate change; pollution abatement; asymmetry; transfers (search for similar items in EconPapers)
JEL-codes: C7 D7 F5 H4 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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DOI: 10.1515/bejeap-2021-0072

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