Is a Uniform Price on Carbon Desirable?

Felix Bierbrauer ()
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Felix Bierbrauer: University of Cologne

No 299, ECONtribute Discussion Papers Series from University of Bonn and University of Cologne, Germany

Abstract: We study the climate policy design problem of a government that seeks to reach a given emission target. Should the government rely on a price of Carbon that is uniform across sectors? We study this question with a focus on equity and efficiency implications. Households differ in incomes and in their preferences over consumption goods. The climate policy mix affects them as consumers, as workers and as shareholders. It is found that a uniform price can be justified, but this requires strong assumptions, among them indifference with respect to the distributive consequences of climate policy.

Keywords: Climate policy; equity-efficiency trade-off; optimal taxation (search for similar items in EconPapers)
JEL-codes: D63 H21 H22 Q58 (search for similar items in EconPapers)
Pages: 63
Date: 2024-07
New Economics Papers: this item is included in nep-ene and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:ajk:ajkdps:299

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