Carbon tax and OPEC's rents under a ceiling constraint
AbstractWe study the Markov-perfect Nash equilibrium (MPNE) of a game between oil-importing countries, who seek to maintain the atmospheric carbon concentration under a given ceiling, and oil-exporting countries. The oil-importing countries set a carbon tax and the oil-exporting countries control the producer price. We obtain implicit feedback rules and explicit non-linear time paths of extraction, carbon tax, and producer price. Consumers are always able to reap some share of the scarcity and monopoly rents, whereas producers partially pre-empt the carbon tax only if the marginal damage under the ceiling is small. We compare the MPNE to the efficient, open-loop, and cartel-without-tax equilibria.
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Bibliographic InfoPaper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00976591.
Date of creation: 2011
Date of revision:
Publication status: Published, Scandinavian Journal of Economics, 2011, 113, 4, 798-824
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Global warming; differential games; non-linear strategies; non-renewable resources;
Other versions of this item:
- 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.
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