Energy Balance Climate Models and the Spatial Structure of Optimal Mitigation Policies

William Brock, Gustav Engstrom and Anastasios Xepapadeas
Additional contact information
Gustav Engstrom: The Beijer Institute of Ecological Economics and University of Stockholm

No 2012.05, Working Papers from Fondazione Eni Enrico Mattei

Abstract: We develop a one-dimensional energy balance climate model with heat transportation across locations. We introduce the concept of potential world GDP at time t, and we introduce, through the temperature function, spatial characteristics into the damage function which make damages latitude dependent. We solve the social planner’s problem and characterize the competitive equilibrium. We define optimal taxes on fossil fuels and profit taxes on firms that extract fossil fuels. Our results suggest that if the implementation of international transfers across latitudes is not possible, then optimal taxes are spatially non homogeneous and tend to be lower at the poor latitudes. The degree of spatial differentiation of optimal taxes depend on heat transportation. We also locate sufficient conditions for optimal mitigation policies to have rapid ramp-up initially and then decrease over time. By employing the properties of the spatial model and approximating solutions, we show how to study the impact of thermal transport across latitudes on welfare inequality.

Keywords: Energy Balance Climate Models; Heat Diffusion; Temperature Distribution; Spatial Optimal Taxes (search for similar items in EconPapers)
JEL-codes: Q54 Q58 (search for similar items in EconPapers)
Date: 2012-01
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://feem-media.s3.eu-central-1.amazonaws.com/w ... oads/NDL2012-005.pdf (application/pdf)

Related works:
Working Paper: Energy Balance Climate Models and the Spatial Structure of Optimal Mitigation Policies (2012)
Working Paper: Energy Balance Climate Models and the Spatial Structure of Optimal Mitigation Policies (2012)
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:fem:femwpa:2012.05

Access Statistics for this paper

More papers in Working Papers from Fondazione Eni Enrico Mattei Contact information at EDIRC.
Bibliographic data for series maintained by Alberto Prina Cerai ( this e-mail address is bad, please contact ).