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

Show simple item record

collection.link.5
https://openknowledge.worldbank.org/handle/10986/9
collection.name.5
Policy Research Working Papers
dc.contributor.author
Strand, Jon
dc.date.accessioned
2012-03-19T18:02:29Z
dc.date.available
2012-03-19T18:02:29Z
dc.date.issued
2011-06-01
dc.date.lastModified
2017-12-14T04:39:39Z
dc.description.abstract
This 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.identifier
http://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.uri
http://hdl.handle.net/10986/3438
dc.language
English
dc.relation.ispartofseries
Policy Research working paper ; no. WPS 5675
dc.rights
CC BY 3.0 IGO
dc.rights.holder
World Bank
dc.rights.uri
http://creativecommons.org/licenses/by/3.0/igo/
dc.subject
ABATEMENT
dc.subject
AGGREGATE DEMAND
dc.subject
AMOUNT OF ABATEMENT
dc.subject
AMOUNT OF EMISSIONS
dc.subject
CAPS
dc.subject
CARBON
dc.subject
CARBON EMISSIONS
dc.subject
CARBON EMISSIONS FROM FOSSIL
dc.subject
CARBON OFFSETS
dc.subject
CARBON PRICE
dc.subject
CARBON PRICES
dc.subject
CARBON QUOTA
dc.subject
CARBON TAX
dc.subject
CARBON TAXES
dc.subject
CARBON TRADING
dc.subject
CLIMATE
dc.subject
CLIMATE CHANGE
dc.subject
CLIMATE POLICIES
dc.subject
CLIMATE POLICY
dc.subject
CO2
dc.subject
COMPETITIVE FRINGE
dc.subject
CONSUMER FUEL
dc.subject
CONSUMER PRICE
dc.subject
DEMAND ELASTICITY
dc.subject
DEMAND FUNCTION
dc.subject
DEMAND FUNCTIONS
dc.subject
DEMAND RESPONSE
dc.subject
DISTRIBUTIONAL IMPLICATIONS
dc.subject
DOMESTIC CARBON
dc.subject
DOMESTIC EMISSIONS
dc.subject
DOMESTIC OFFSETS
dc.subject
DYNAMIC MODEL
dc.subject
ECONOMIC ANALYSIS
dc.subject
ECONOMIC MODEL
dc.subject
EMISSION
dc.subject
EMISSION QUOTAS
dc.subject
EMISSION RATE
dc.subject
EMISSIONS
dc.subject
EMISSIONS QUOTAS
dc.subject
EMISSIONS REDUCTIONS
dc.subject
ENERGY DEMAND
dc.subject
ENERGY ECONOMICS
dc.subject
ENVIRONMENTAL ECONOMICS
dc.subject
FOSSIL FUEL
dc.subject
FOSSIL FUEL CONSUMPTION
dc.subject
FOSSIL FUEL DEMAND
dc.subject
FOSSIL FUELS
dc.subject
FUEL CONSUMPTION
dc.subject
FUEL DEMAND
dc.subject
FUEL EXTRACTION
dc.subject
FUEL MARKET
dc.subject
FUEL PRICE
dc.subject
FUEL PRODUCTION
dc.subject
FUEL SUPPLY
dc.subject
GHGS
dc.subject
GLOBAL CARBON EMISSIONS
dc.subject
GLOBAL CLIMATE CHANGE
dc.subject
GLOBAL EMISSIONS
dc.subject
GLOBAL WARMING
dc.subject
GOVERNMENT PURCHASES
dc.subject
GREENHOUSE
dc.subject
GREENHOUSE GAS
dc.subject
GREENHOUSE GAS EMISSIONS
dc.subject
HC
dc.subject
IMPACTS OF CLIMATE CHANGE
dc.subject
INCOME
dc.subject
MARKET EQUILIBRIUM
dc.subject
MARKET FOR OFFSETS
dc.subject
MARKET POWER
dc.subject
MONOPOLIES
dc.subject
MONOPOLY
dc.subject
NONRENEWABLE RESOURCE
dc.subject
OFFSET PAYMENTS
dc.subject
OFFSET PRICE
dc.subject
OFFSET PRICES
dc.subject
OIL
dc.subject
OIL DEMAND
dc.subject
PETROLEUM
dc.subject
PETROLEUM PRODUCERS
dc.subject
POWER
dc.subject
PRICE CHANGES
dc.subject
PRICE INCREASES
dc.subject
PRICING POLICY
dc.subject
PUBLIC ECONOMICS
dc.subject
PURCHASING
dc.subject
RENEWABLE RESOURCE
dc.subject
RENEWABLE RESOURCES
dc.subject
SUPPLIERS
dc.subject
SUPPLY ELASTICITY
dc.subject
SUPPLY FUNCTION
dc.subject
SUPPLY FUNCTIONS
dc.subject
TAX RATE
dc.subject
TAX RATES
dc.subject
TAX REVENUE
dc.subject
TOTAL DEMAND
dc.subject
UTILITY FUNCTION
dc.title
Strategic Climate Policy with Offsets and Incomplete Abatement : Carbon Taxes Versus Cap-and-Trade
en
okr.date.disclosure
2011-06-01
okr.doctype
Publications & Research :: Policy Research Working Paper
okr.docurl
http://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.globalpractice
Energy and Extractives
okr.googlescholar.linkpresent
yes
okr.identifier.doi
10.1596/1813-9450-5675
okr.identifier.externaldocumentum
000158349_20110602165151
okr.identifier.internaldocumentum
14286602
okr.identifier.report
WPS5675
okr.language.supported
en
okr.pdfurl
http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2011/06/02/000158349_20110602165151/Rendered/PDF/WPS5675.pdf
en
okr.region.administrative
The World Region
okr.region.administrative
The World Region
okr.relation.associatedurl
https://openknowledge.worldbank.org/handle/10986/13460
okr.topic
Energy :: Energy Production and Transportation
okr.unit
Development Research Group (DECRG)
okr.volume
1 of 1

Show simple item record



This item appears in the following Collection(s)