Global refunding and climate change

Hans Gersbach and Ralph Winkler

Journal of Economic Dynamics and Control, 2012, vol. 36, issue 11, 1775-1795

Abstract: We design a global refunding scheme as a new international approach to address climate change. Participating in the global refunding system requires an initial payment. It allows each country to set its carbon emission tax, while aggregate tax revenues are partially refunded to member countries in proportion to the relative emission reductions they achieve within a given period. The refunding scheme reduces the intertemporal climate change problem into a static public goods problem. In a simple model we show that a suitably designed global refunding scheme achieves the social global optimum, provided that all countries participate. We discuss several procedures to achieve initial participation.

Keywords: Climate change mitigation; Global refunding scheme; International agreements; Incentive-compatible mechanisms (search for similar items in EconPapers)
JEL-codes: H23 H41 Q54 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:36:y:2012:i:11:p:1775-1795

DOI: 10.1016/j.jedc.2012.06.001

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