Climate Policy and Development

Hans Gersbach and Noemi Hummel

No 2807, CESifo Working Paper Series from CESifo

Abstract: We propose a development-compatible refunding system designed to mitigate climate change. Industrial countries pay an initial fee into a global fund. Each country chooses its national carbon tax. Part of the global fund is refunded to developing and industrial countries, in proportion to the relative emission reductions they achieve. Countries receive refunds net of tax revenues. We show that such a scheme can simultaneously achieve efficient emission reductions and equity objectives, as developing countries abate voluntarily, do not have to pay an initial fee, and are net receivers of funds. Moreover, we explore the potential of simple refunding schemes that do not claim tax revenues and only rely on initial fees paid by industrial countries.

Keywords: climate change mitigation; refunding scheme; international agreements; developing countries (search for similar items in EconPapers)
JEL-codes: H23 H41 O10 O13 Q54 (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2807

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