Carbon Taxes vs. Cap and Trade:  A Critical Review

Goulder, Lawrence H.; Schein, Andrew Ribet

doi:10.3386/w19338

Cited by 58 publications

(14 citation statements)

References 44 publications

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“…Proposition 1 Under the linearity assumptions (8) and (12), the relationship between the world carbon-price level P i that i would most prefer and the world SCC of P is given by the expression…”

Section: A First Main Resultsmentioning

confidence: 99%

“…These COP21 contributions are intended and nationally-determined. 8 It is hard for me to envision how the labels could more strongly emphasize the strictly voluntary nature of the entire exercise. This does not seem likely to overcome free-riding in the international public goods problem that is central to climate change policy.…”

Section: Brief Background History Of Climate Negotiationsmentioning

confidence: 99%

“…Much less the virtually-impossible 1:5 C goal also mentioned in the Paris COP21 agreement 8. When a state formally submits its instrument of rati…cation to the UNFCC Secretariat, it is supposed to include its NDC (no I).…”

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confidence: 99%

“…See, e.g., the survey byGoulder and Schein (2013) and the many further references they cite. Ease of administration (and avoidance of stealing) is one consideration that emerges from this literature.…”

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confidence: 99%

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On a World Climate Assembly and the Social Cost of Carbon

Weitzman¹

2016

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This paper postulates the conceptually useful allegory of a futuristic "World Climate Assembly" (WCA) that votes for a single worldwide price on carbon emissions via the basic democratic principle of one-person one-vote majority rule. If this WCA framework can be accepted in the first place, then voting on a single internationally-binding minimum carbon price (the proceeds from which are domestically retained) tends to counter self-interest by incentivizing countries or agents to internalize the externality. I attempt to sketch out the sense in which each WCA-agent's extra cost from a higher emissions price is counter-balanced by that agent's extra benefit from inducing all other WCA-agents to simultaneously lower their emissions in response to the higher price. The first proposition of this paper derives a relatively simple formula relating each emitter's single-peaked most-preferred world price of carbon emissions to the world "Social Cost of Carbon" (SCC). The second and third propositions relate the WCA-voted world price of carbon to the world SCC. I argue that the WCA-voted price and the SCC are unlikely to differ sharply. Some implications are discussed. The overall methodology of the paper is a mixture of mostly classical with some behavioral economics.

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Section: A First Main Resultsmentioning

confidence: 99%

Section: Brief Background History Of Climate Negotiationsmentioning

confidence: 99%

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confidence: 99%

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confidence: 99%

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On a World Climate Assembly and the Social Cost of Carbon

Weitzman¹

2016

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“…Conversely, the sign of Δ is negative (quantities are preferred over ideological, legal, social, historical, administrative, motivational, informational, timing, lobbying, monitoring and enforcing considerations, or any other issues that are not purely economic, are beyond the scope of this paper. For a balanced and overarching discussion of both theoretical and practical issues involved in choosing between carbon taxes and a cap-and-trade system, see the review article of Goulder and Schein (2013) and the many references cited therein. prices) when the marginal benefit curve is steeper than the marginal cost curve.…”

Section: Introductionmentioning

confidence: 99%

Prices or Quantities Can Dominate Banking and Borrowing*

Weitzman

2019

Scandinavian J Economics

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The possibility of intertemporal banking and borrowing of tradable permits is often viewed as tilting the various policy debates about optimal pollution control instruments towards favoring such time‐flexible quantities. This paper shows that this view can be misleading, at least for the simplest dynamic extension of the original “prices versus quantities” information structure. The model of this paper allows firms to know and act upon the realization of uncertain future costs two full periods ahead of the regulators. For any given circumstance, the paper shows that either a fixed price or a fixed quantity is superior in expected welfare to time‐flexible banking and borrowing. Furthermore, the standard original formula for the comparative advantage of prices over quantities contains sufficient information to completely characterize the regulatory role of intertemporal banking and borrowing. The logic and implications of these results are analyzed and discussed.

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Konzeptuelle Analyse der internen Logistik von Daimler Trucks in einem 2 °C Szenario

Helmke

Fröhlich

2016

CSR Und Logistik

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Carbon Taxes vs. Cap and Trade: A Critical Review

Cited by 58 publications

References 44 publications

On a World Climate Assembly and the Social Cost of Carbon

On a World Climate Assembly and the Social Cost of Carbon

Prices or Quantities Can Dominate Banking and Borrowing*

Konzeptuelle Analyse der internen Logistik von Daimler Trucks in einem 2 °C Szenario

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