Spatial Climate-Economic Models in the Design of Optimal Climate Policies Across Locations

William Brock, Gustav Engström and Anastasios Xepapadeas
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Gustav Engström: The Beijer Institute of Ecological Economics and University of Stockholm

No 2012.74, Working Papers from Fondazione Eni Enrico Mattei

Abstract: We couple a one-dimensional energy balance climate model with heat transportation across latitudes, with an economic growth model. We derive temperature and damage distributions across locations and optimal taxes on fossil fuels which, in contrast to zero-dimensional Integrated Assessment Models, account for cross latitude externalities. We analyse the impact of welfare weights on the spatial structure of optimal carbon taxes and identify conditions under which these taxes are spatially nonhomogeneous and are lower in latitudes with relatively lower per capita income populations. We show the way that heat transportation affects local economic variables and taxes, and locate sufficient conditions for optimal mitigation policies to have rapid ramp-up initially and then decrease over time.

Keywords: One-dimensional Energy Balance Model; Heat Transport; Latitudes; Temperature Distribution; Damage Distribution; Social Planner; Competitive Equilibrium; Local Welfare Weights; Optimal Taxes (search for similar items in EconPapers)
JEL-codes: Q54 Q58 R11 (search for similar items in EconPapers)
Date: 2012-10
New Economics Papers: this item is included in nep-ene, nep-env, nep-geo, nep-pbe and nep-res
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Spatial climate-economic models in the design of optimal climate policies across locations (2014)
Working Paper: Spatial Climate-Economic Models in the Design of Optimal Climate Policies across Locations (2012)
Working Paper: Spatial Climate-Economic Models in the Design of Optimal Climate Policies across Locations (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2012.74

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