Optimally differentiated carbon prices for unilateral climate policy

Stefan Boeters

Energy Economics, 2014, vol. 45, issue C, 304-312

Abstract: Economic thought on climate policy as an instance of environmental regulation is strongly influenced by the principle of a uniform carbon price. Economists acknowledge that this principle breaks down in a “second-best” world with other distortions, such as taxes and market power in domestic and international markets. However, systematic analysis of this point in the economic climate policy literature is scarce. In the present paper, a computable general equilibrium (CGE) set-up is chosen in order to examine what pattern of differentiated carbon prices emerges as optimal in a second-best world.

Keywords: Climate policy; Uniform carbon price; Carbon price differentiation; Optimal taxation; Computable general equilibrium model (search for similar items in EconPapers)
JEL-codes: D58 H21 H23 Q42 Q54 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Related works:
Working Paper: Optimally Differentiated Carbon Prices for Unilateral Climate Policy (2014)
Working Paper: Optimally Differentiated Carbon Prices for Unilateral Climate Policy (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:45:y:2014:i:c:p:304-312

DOI: 10.1016/j.eneco.2014.07.015

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