A service provided by the WU Library and the WU IT-Services

Cumulative Emissions, Unburnable Fossil Fuel and the Optimal Carbon Tax

Rezai, Armon and Van der Ploeg, Frederick (2016) Cumulative Emissions, Unburnable Fossil Fuel and the Optimal Carbon Tax. Ecological Economic Papers, 8. WU Vienna University of Economics and Business, Vienna.

[img]
Preview
PDF
Download (1133Kb) | Preview

Abstract

A new IAM is used to calculate the optimal tradeoff between, on the one hand,locking up fossil fuel and curbing global warming, and, on the other hand,sacrificing consumption now and in the near future. This IAM uses the Oxford carbon cycle, which differs from DICE, FUND and PAGE in that cumulative emissions are the key driving force of changes in temperature. We highlight how time impatience, intergenerational inequality aversion and expected trend growth affect the time paths of the optimal global carbon tax and the optimal amount of fossil fuel reserves to leave untapped. We also compare these with the adverse and deleterious global warming trajectories that occur if no policy actions are taken. (authors' abstract)

Item Type: Paper
Keywords: unburnable fossil fuel / cumulative emissions / optimal carbon tax / Oxford carbon cycle / trend growth / intergenerational inequality aversion / time impatience
Divisions: Departments > Sozioökonomie > Ecological Economics
Depositing User: Karin Lagger
Date Deposited: 13 Jan 2016 11:48
Last Modified: 10 Jun 2016 13:55
URI: http://epub.wu.ac.at/id/eprint/4795

References

Allen, M., D. Frame, C. Huntingford, C. Jones, J. Lowe, M. Meinshausen and N.Meinshausen (2009). Warming caused by cumulative carbon emissions towards the trillionth tonne, Nature, 458, 7242, 1163-1166.

Barro, R.J. (2014). Convergence and modernization, mimeo., Harvard University, Cambridge, Mass.

Clarke et al. (2014). Chapter 6 in O Edenhofer et al. (eds.), IPPC Climate Change 2014: Mitigation of Climate Change, Cambridge University Press.

Gerlagh, R. and M. Liski (2014). Carbon taxes for the next thousand years, mimeo., Tilburg University.

Golosov, M., J. Hassler, P. Krusell and A. Tsyvinski (2014). Optimal taxes on fossil fuel in general equilibrium, Econometrica, 82, 1, 41-88.

Hope, C. (2006). The marginal impact of CO2 from PAGE2002: an integrated assessment model incorporating the IPCC's five reasons for concern, Integrated Assessment, 6, 1, 19-56.

IPCC (2014). Climate Change 2014, AR5 Synthesis Report. Accessed 24 May 2015 at http://www.ipcc.ch/pdf/assessment-report/ar5/syr/syr_ar5_final_spm.pdf.

McGlade, C. and P. Ekins (2015). The geographical distribution of fossil fuels unused when limiting global warming to 20 C, Nature, 517, 187-190.

Meinshausen, M., N. Meinshausen, W. Hare, S.C.B. Raper, K. Frieler, R. Knutti, D.J.Frame and M.R. Allen (2009). Greenhouse gas emission targets for limiting global warming to 20 C, Nature, 458, 1158-1162 Nordhaus, W. (2014). Estimates of the social cost of carbon: concepts and results from the DICE-2013R model and alternative approaches, Journal of the Association of Environmental and Resource Economists, 1, 273-312.

Pindyck, R.S. (2013). Climate change policy: what do the models tell us?, Journal of Economic Literature, 51, 3, 860-872.

Rezai, A. and F. van der Ploeg (2014). Abandoning fossil fuel: how fast and how much?, Research Paper 123, OxCARRE, University of Oxford.

Rezai, A. and F. van der Ploeg (2015). Intergenerational inequality aversion, growth and the role of damages: Occam's rule for the global carbont tax, Research Paper 150, OxCARRE, University of Oxford.

Stern, N. (2007). The Economics of Climate Change: The Stern Review, Cambridge University Press.

Tol, R.S.J. (2002a). Estimates of the damage costs of climate change, part I: benchmark estimates, Environmental and Resource Economics, 21, 1, 47-73.

Tol, R.S.J. (2002b). Estimates of the damage costs of climate change, part II: dynamic estimates, Environmental and Resource Economics, 21, 2, 135-160.

Weitzman, M.L. (2007). A review of the Stern Review on the economics of climate change, Journal of Economic Literature, 45, 3, 703-724.

Actions

View Item