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Climate Effects of Carbon Taxes, Taking into Account Possible Other Future Climate Measures

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  • Florian Habermacher
  • Gebhard Kirchgässner

Abstract

The increase of fuel extraction costs as well as of temperature will make it likely that in the medium-term future technological or political measures against global warming may be implemented. In assessments of a current climate policy the possibility of medium-term future developments like backstop technologies is largely neglected but can crucially affect its impact. Given such a future measure, a currently introduced carbon tax may more generally mitigate climate change than recent reflections along the line of the Green Paradox would suggest. Notably, the weak and the strong version of the Green Paradox, related to current and longer-term emissions, may not materialize. Moreover, the tax may allow the demanding countries to extract part of the resource rent, further increasing its desirability.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2011/wp-cesifo-2011-03/cesifo1_wp3404.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3404.

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Date of creation: 2011
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Handle: RePEc:ces:ceswps:_3404

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Related research

Keywords: climate change policy; greenhouse gas tax; carbon tax; Green Paradox; anticipation effects; exhaustible resources; fossil fuels market; backstop technology; uncertainty; resource rent;

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References

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  1. Frederick Van der Ploeg & Cees A. Withagen, 2010. "Is There Really a Green Paradox?," CESifo Working Paper Series 2963, CESifo Group Munich.
  2. Frederick van der Ploeg & Cees Withagen, 2011. "Too Much Coal, Too Little Oil," OxCarre Working Papers 056, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  3. Rémy Dullieux & Lionel Ragot & Katheline Schubert, 2011. "Carbon Tax and OPEC’s Rents Under a Ceiling Constraint," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113(4), pages 798-824, December.
  4. Reyer Gerlagh, 2010. "Too Much Oil," Working Papers 2010.14, Fondazione Eni Enrico Mattei.
  5. Michael Hoel, 2010. "Is there a Green Paradox?," CESifo Working Paper Series 3168, CESifo Group Munich.
  6. Pearce, David W, 1991. "The Role of Carbon Taxes in Adjusting to Global Warming," Economic Journal, Royal Economic Society, vol. 101(407), pages 938-48, July.
  7. Liski, Matti & Tahvonen, Olli, 2004. "Can carbon tax eat OPEC's rents?," Journal of Environmental Economics and Management, Elsevier, vol. 47(1), pages 1-12, January.
  8. Hans-Werner Sinn, 2008. "Public policies against global warming: a supply side approach," International Tax and Public Finance, Springer, vol. 15(4), pages 360-394, August.
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Cited by:
  1. Habermacher, Florian, 2011. "Optimal Fuel-Specific Carbon Pricing and Time Dimension of Leakage," Economics Working Paper Series 1144, University of St. Gallen, School of Economics and Political Science, revised Jan 2012.

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