Public Policies against Global Warming

Hans-Werner Sinn

No 13454, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Judged by the principle of intertemporal Pareto optimality, insecure property rights and the greenhouse effect both imply overly rapid extraction of fossil carbon resources. A gradual expansion of demand-reducing public policies -- such as increasing ad-valorem taxes on carbon consumption or increasing subsidies for replacement technologies -- may exacerbate the problem as it gives resource owners the incentive to avoid future price reductions by anticipating their sales. Useful policies instead involve sequestration, afforestation, stabilization of property rights and emissions trading. Among the public finance measures, constant unit carbon taxes and source taxes on capital income for resource owners stand out.

JEL-codes: H23 O13 Q32 Q54 (search for similar items in EconPapers)
Date: 2007-09
New Economics Papers: this item is included in nep-agr, nep-ene and nep-env
Note: EEE PE
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Citations: View citations in EconPapers (44)

Published as "Public Policies against Global Warming: a supply side approach“, International Tax and Public Finance 15 (4), 2008, pp. 360-394; (Download, 1.9 MB); CESifo Working Paper No. 2087, August 2007; (Download, 841 KB).

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Working Paper: Public Policies against Global Warming (2007)
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