Abstinence with Reputation Loss, Understating Expectations and Guiltand the Effectiveness of Emission Tax

Amnon Levy

Economics Working Papers from School of Economics, University of Wollongong, NSW, Australia

Abstract: The responsibility for, and consequences of, greenhouse gas emissions are shared by all countries, but only a few are willing to tax emissions. The paper argues that the reactions of the abstaining countries are crucial for assessing the effectiveness of the tax. The paper analyzes an interaction between a tax-collecting and investing coalition of rich countries, abstaining rich countries and poor countries. The non-coalition countries might have loss of reputation and guilt and overstate the tax’s emission-moderating effect. As long as these three types of countries react to their counterparts’ emissions, taxing emissions does not necessarily reduce the global emissions.

Keywords: Emission Tax; Abstinence; Understating Expectations; Guilt; Global Emissions (search for similar items in EconPapers)
JEL-codes: Q52 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2011
New Economics Papers: this item is included in nep-acc, nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Working Paper: Abstinence with Reputation Loss, Understating Expectations and Guiltand the Effectiveness of Emission Tax (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:uow:depec1:wp11-01

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