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On the Design of Global Refunding and Climate Change

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Abstract

We design a global refunding scheme as a new international approach to address climate change. A global refunding system allows each country to set its carbon emission tax, while aggregate tax revenues are partially refunded to member countries in proportion to the relative emission reductions they achieve within a given period, compared to some given baseline emissions. In a simple model we show that a suitably designed global refunding scheme is self-enforcing and achieves the social global optimum

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Bibliographic Info

Paper provided by CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich in its series CER-ETH Economics working paper series with number 07/69.

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Length: 34 pages
Date of creation: Jan 2007
Date of revision: Jul 2007
Handle: RePEc:eth:wpswif:07-69

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Keywords: climate change mitigation; global refunding scheme; international agreements; self-enforcing mechanisms;

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References

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  8. Goulder, Lawrence H. & Pizer, William A., 2006. "The Economics of Climate Change," Discussion Papers dp-06-06, Resources For the Future.
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Citations

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Cited by:
  1. Gersbach, Hans & Hummel, Noemi, 2011. "Climate Policy and Developing Countries," CEPR Discussion Papers 8685, C.E.P.R. Discussion Papers.
  2. Anke Gerber & Philipp C. Wichardt, 2008. "Providing Public Goods in the Absence of Strong Institutions," IEW - Working Papers 303, Institute for Empirical Research in Economics - University of Zurich.
  3. Hans Gersbach & Ralph Winkler, 2008. "International Emission Permit Markets with Refunding," CER-ETH Economics working paper series 08/97, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
  4. Edward J. Balistreri & Russell H. Hillberry & Thomas F. Rutherford, 2008. "Structural Estimation and Solution of International Trade Models with Heterogeneous Firms," Department of Economics - Working Papers Series 1056, The University of Melbourne.
  5. Boadway, Robin & Song, Zhen & Tremblay, Jean-François, 2011. "The efficiency of voluntary pollution abatement when countries can commit," European Journal of Political Economy, Elsevier, vol. 27(2), pages 352-368, June.
  6. David de la Croix & Frederic Docquier, 2010. "An Incentive Mechanism to Break the Low-skill Immigration Deadlock," CReAM Discussion Paper Series 1008, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  7. Hans Gersbach & Noemi Hummel & Ralph Winkler, 2011. "Sustainable Climate Treaties," CER-ETH Economics working paper series 11/146, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
  8. Hans Gersbach & Noemi Hummel, 2009. "Climate Policy and Development," CESifo Working Paper Series 2807, CESifo Group Munich.
  9. Boadway, Robin & Song, Zhen & Tremblay, Jean-François, 2013. "Non-cooperative pollution control in an inter-jurisdictional setting," Regional Science and Urban Economics, Elsevier, vol. 43(5), pages 783-796.
  10. Susumu Cato, 2010. "Emission Taxes and Optimal Refunding Schemes with Endogenous Market Structure," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 46(3), pages 275-280, July.

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