Publication:
Strategic Climate Policy with Offsets and Incomplete Abatement : Carbon Taxes Versus Cap-and-Trade

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dc.contributor.authorStrand, Jon
dc.date.accessioned2012-03-19T18:02:29Z
dc.date.available2012-03-19T18:02:29Z
dc.date.issued2011-06-01
dc.description.abstractThis paper provides a first analysis of optimal offset policies by a "policy bloc" of fossil fuel importers implementing a climate policy, facing a (non-policy) fringe of other importers, and a bloc of fuel exporters. The policy bloc uses either a carbon tax or a cap-and-trade scheme, jointly with a fully efficient offset mechanism for reducing emissions in the fringe. The policy bloc is then shown to prefer a tax over a cap-and-trade scheme, since 1) a tax extracts more rent as fuel exporters reduce the export price, and more so when the policy bloc is larger relative to the fringe; and 2) offsets are more favorable to the policy bloc under a tax than under a cap-and-trade scheme. The optimal offset price under a carbon tax is half the tax rate; under a cap-and-trade scheme the quota and offset price are equal. The domestic carbon and offset price are both higher under a tax than under a cap-and-trade scheme when the policy bloc is small; when it is larger the offset price can be higher under a cap-and-trade scheme. Fringe countries gain by mitigation in the policy bloc, and more under a carbon tax since the fuel import price is lower, and since the price obtained when selling offsets is often higher (always so for a large fringe).en
dc.identifierhttp://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110602165151
dc.identifier.doi10.1596/1813-9450-5675
dc.identifier.urihttps://hdl.handle.net/10986/3438
dc.languageEnglish
dc.relation.ispartofseriesPolicy Research working paper ; no. WPS 5675
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectABATEMENT
dc.subjectAGGREGATE DEMAND
dc.subjectAMOUNT OF ABATEMENT
dc.subjectAMOUNT OF EMISSIONS
dc.subjectCAPS
dc.subjectCARBON
dc.subjectCARBON EMISSIONS
dc.subjectCARBON EMISSIONS FROM FOSSIL
dc.subjectCARBON OFFSETS
dc.subjectCARBON PRICE
dc.subjectCARBON PRICES
dc.subjectCARBON QUOTA
dc.subjectCARBON TAX
dc.subjectCARBON TAXES
dc.subjectCARBON TRADING
dc.subjectCLIMATE
dc.subjectCLIMATE CHANGE
dc.subjectCLIMATE POLICIES
dc.subjectCLIMATE POLICY
dc.subjectCO2
dc.subjectCOMPETITIVE FRINGE
dc.subjectCONSUMER FUEL
dc.subjectCONSUMER PRICE
dc.subjectDEMAND ELASTICITY
dc.subjectDEMAND FUNCTION
dc.subjectDEMAND FUNCTIONS
dc.subjectDEMAND RESPONSE
dc.subjectDISTRIBUTIONAL IMPLICATIONS
dc.subjectDOMESTIC CARBON
dc.subjectDOMESTIC EMISSIONS
dc.subjectDOMESTIC OFFSETS
dc.subjectDYNAMIC MODEL
dc.subjectECONOMIC ANALYSIS
dc.subjectECONOMIC MODEL
dc.subjectEMISSION
dc.subjectEMISSION QUOTAS
dc.subjectEMISSION RATE
dc.subjectEMISSIONS
dc.subjectEMISSIONS QUOTAS
dc.subjectEMISSIONS REDUCTIONS
dc.subjectENERGY DEMAND
dc.subjectENERGY ECONOMICS
dc.subjectENVIRONMENTAL ECONOMICS
dc.subjectFOSSIL FUEL
dc.subjectFOSSIL FUEL CONSUMPTION
dc.subjectFOSSIL FUEL DEMAND
dc.subjectFOSSIL FUELS
dc.subjectFUEL CONSUMPTION
dc.subjectFUEL DEMAND
dc.subjectFUEL EXTRACTION
dc.subjectFUEL MARKET
dc.subjectFUEL PRICE
dc.subjectFUEL PRODUCTION
dc.subjectFUEL SUPPLY
dc.subjectGHGS
dc.subjectGLOBAL CARBON EMISSIONS
dc.subjectGLOBAL CLIMATE CHANGE
dc.subjectGLOBAL EMISSIONS
dc.subjectGLOBAL WARMING
dc.subjectGOVERNMENT PURCHASES
dc.subjectGREENHOUSE
dc.subjectGREENHOUSE GAS
dc.subjectGREENHOUSE GAS EMISSIONS
dc.subjectHC
dc.subjectIMPACTS OF CLIMATE CHANGE
dc.subjectINCOME
dc.subjectMARKET EQUILIBRIUM
dc.subjectMARKET FOR OFFSETS
dc.subjectMARKET POWER
dc.subjectMONOPOLIES
dc.subjectMONOPOLY
dc.subjectNONRENEWABLE RESOURCE
dc.subjectOFFSET PAYMENTS
dc.subjectOFFSET PRICE
dc.subjectOFFSET PRICES
dc.subjectOIL
dc.subjectOIL DEMAND
dc.subjectPETROLEUM
dc.subjectPETROLEUM PRODUCERS
dc.subjectPOWER
dc.subjectPRICE CHANGES
dc.subjectPRICE INCREASES
dc.subjectPRICING POLICY
dc.subjectPUBLIC ECONOMICS
dc.subjectPURCHASING
dc.subjectRENEWABLE RESOURCE
dc.subjectRENEWABLE RESOURCES
dc.subjectSUPPLIERS
dc.subjectSUPPLY ELASTICITY
dc.subjectSUPPLY FUNCTION
dc.subjectSUPPLY FUNCTIONS
dc.subjectTAX RATE
dc.subjectTAX RATES
dc.subjectTAX REVENUE
dc.subjectTOTAL DEMAND
dc.subjectUTILITY FUNCTION
dc.titleStrategic Climate Policy with Offsets and Incomplete Abatement : Carbon Taxes Versus Cap-and-Tradeen
dspace.entity.typePublication
okr.crossref.titleStrategic Climate Policy with Offsets and Incomplete Abatement: Carbon Taxes versus Cap-and-Trade
okr.date.disclosure2011-06-01
okr.date.doiregistration2025-04-10T11:26:53.591182Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.docurlhttp://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110602165151
okr.globalpracticeEnergy and Extractives
okr.guid805211468163482291
okr.identifier.doi10.1596/1813-9450-5675
okr.identifier.externaldocumentum000158349_20110602165151
okr.identifier.internaldocumentum14286602
okr.identifier.reportWPS5675
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2011/06/02/000158349_20110602165151/Rendered/PDF/WPS5675.pdfen
okr.region.administrativeThe World Region
okr.region.administrativeThe World Region
okr.relation.associatedurlhttps://openknowledge.worldbank.org/handle/10986/13460
okr.topicEnergy::Energy Production and Transportation
okr.unitDevelopment Research Group (DECRG)
okr.volume1 of 1
relation.isAuthorOfPublicationc9d5219c-9076-5386-b0d2-03bab820c61d
relation.isAuthorOfPublication.latestForDiscoveryc9d5219c-9076-5386-b0d2-03bab820c61d
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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