Carbon Leakage: A Medium- and Long-Term View

Florian Habermacher

No 5216, CESifo Working Paper Series from CESifo

Abstract: Future market developments determine the fate of fossil fuel carbon currently conserved unilaterally. Dynamic fuel depletion naturally suggests leakage rates approaching 100%. Reasons for lower leakage differ from what limits rates in previous studies. Discounting reduces present-value leakage as global emissions are delayed. Containing climate change requires future global political or technological breakthroughs to conserve some carbon forever. Early breakthroughs limit leakage but with late breakthroughs most unilateral emission reductions may be negated abroad. Future coal liquefaction suggests negative leakage rates for current mitigation, but a perfect backstop allows leakage above unity. Leakage rates and suggested taxes vary across fuels.

Keywords: unilateral climate policy; emission impulse response; fossil fuel depletion; dynamic carbon leakage; discounting; fuel specific carbon tax; coal liquefaction; backstop; OECD (search for similar items in EconPapers)
JEL-codes: H21 H23 Q41 Q54 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp5216.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_5216

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().