High Does Nothing and Rising Is Worse: Carbon Taxes Should Keep Declining to Cut Harmful Emissions

Sinclair, Peter

doi:10.1111/j.1467-9957.1992.tb00209.x

Cited by 115 publications

(108 citation statements)

References 4 publications

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“…Support for alternative energy sources is not the only type of policy that affects the Since it is the profile of discounted instantaneous profits for resource owners that determines their extraction path, a carbon tax that increases over time -like the one recently implemented in Australia (Australian Government, 2012) -may not be sufficient to postpone emissions, a point already made clearly by Sinclair (1992), for example. Indeed, a carbon tax that grows at a rate higher than the discount rate will, in a world with constant marginal extraction costs and in the absence of a substitute fuel, induce an increase in current extraction.…”

Section: Is There Really Really a Green Paradox?mentioning

confidence: 99%

Going Full Circle: Demandside Constraints to the Green Paradox

Maria¹,

Lange²,

Werf³

2014

Climate Policy and Nonrenewable Resources

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We argue that the literature on the green paradox has largely ignored the demand side of the resource market, and that this side of the market may mitigate the size of an emissions increase in response to imperfect climate policies. These claims are informed by recent empirical findings. Our arguments lead to clear policy recommendations. Terms of use: Documents in EconStor mayJEL-Code: Q310, Q380, Q580.

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Section: Is There Really Really a Green Paradox?mentioning

confidence: 99%

Going Full Circle: Demandside Constraints to the Green Paradox

Maria¹,

Lange²,

Werf³

2014

Climate Policy and Nonrenewable Resources

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“…Shall we expect to observe a monotone relationship between the optimal carbon tax and the residual stock of the natural resource being extracted? According to Sinclair (1992) and Ulph and Ulph (1994), the optimal tax is indeed decreasing over time as the residual resource stock also declines, provided that the percentage reduction in that same stock determines the rate of growth of pollution. However, Ulph and Ulph (1994) show that if instead one allows for a full- ‡edged picture in which CO 2 emissions are not measured by the extraction rate, then the optimal carbon tax is initially increasing (when the stock of pollution is comparatively small) and then decreasing (towards the end of the natural resource's life).…”

Section: Related Literaturementioning

confidence: 99%

“…Unsurprisingly, oligopolistic interaction has not been considered as a fundamental ingredient in modelling this issue. In fact, the backbone of the dynamic analysis carried out on this leitmotiv (Markusen, 1975;Sinclair, 1992Sinclair, , 1994Ulph and Ulph, 1994;Wirl, 1994;1995;Hoel and Kverndokk, 1996;Tahvonen, 1996;Rubio and Escriche, 2001) focusses on monopolistic extraction, where this single agent is a cartel (say, OPEC).…”

Section: Related Literaturementioning

confidence: 99%

On the Interplay between Resource Extraction and Polluting Emissions in Oligopoly

Lambertini

2014

SSRN Journal

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This paper o¤ers an overview of the literature discussing oligopoly games in which polluti ng emissions are generated by the supply of goods requiring a natural resource as an input. An analytical summary of the main features of the interplay between pollution and resource extraction is then given using a di¤erential game based on the Cournot oligopoly model, in which (i) the bearings on resource preservation of Pigouvian tax rate tailored on emissions are singled out and (ii) the issue of the optimal number of …rms in the commons is also addressed.

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“…However, a complicating factor in this case is that mitigation can only be enforced via a tax rate that decreases over time to provide an incentive for conservation (Sinclair, 1992). Thus, the objectives of climate change mitigation and rent extraction for the public have to be weighed against each other.…”

Section: Mitigated Underinvestment: Inducing a 'Macroeconomic Portfolmentioning

confidence: 99%

A Public Finance Perspective on Climate Policy: Six Interactions That May Enhance Welfare

et al. 2015

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Climate change economics mostly neglects sizeable interactions of carbon pricing with other fiscal policy instruments. Conversely, public finance typically overlooks the effects of future decarbonization efforts when devising instruments for the major goals of fiscal policy. We argue that such a compartmentalisation is undesirable: policy design taking into account such interdependencies may enhance welfare and change the distribution of mitigation costs within and across generations. This claim is substantiated by analyzing six interactions between climate policy and public finance that are insufficiently explored in current research: (i) reduced tax competition in an open economy, (ii) portfolio effects induced through climate policy, (iii) restructuring public spending, (iv) revenue recycling for productive public investment, (v) greater intragenerational equity through appropriate revenue recycling and (vi) intergenerational Pareto-improvements through intertemporal transfers. We thereby structure the hitherto identified interactions between climate change mitigation and public finance and show that jointly considering carbon pricing and fiscal policy is legitimate and mandatory for sound policy appraisal.JEL classification: B41, H21, H23, H54, H60, Q54

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High Does Nothing and Rising Is Worse: Carbon Taxes Should Keep Declining to Cut Harmful Emissions

Cited by 115 publications

References 4 publications

Going Full Circle: Demandside Constraints to the Green Paradox

Going Full Circle: Demandside Constraints to the Green Paradox

On the Interplay between Resource Extraction and Polluting Emissions in Oligopoly

A Public Finance Perspective on Climate Policy: Six Interactions That May Enhance Welfare

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