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Certainty and Uncertainty in Cap and Trade System or in Carbon Tax for Green Accounting to Decrease Greenhouse gas Emissions

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  • Mohajan, Haradhan
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    Abstract

    This paper analyzes the price or quantity controls of greenhouse gases in the presence of uncertain costs. The greenhouse gases are a stock pollutant in the environment. Hence, the marginal benefit curve must be relatively flat which indicates to establish the preference of a price control over a quantity control. In the case of permanent shocks, the traditional comparison of marginal benefits versus marginal costs cannot be measured accurately. The choice between quantity and price controls becomes ambiguous and depends upon a more difficult measurement of marginal costs and benefits. The aim of the paper is to impose taxes to reduce greenhouse gas emissions.

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    File URL: http://mpra.ub.uni-muenchen.de/50669/
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    Bibliographic Info

    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 50669.

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    Date of creation: 09 Nov 2012
    Date of revision: 20 Dec 2012
    Publication status: Published in Indus Journal of Management & Social Sciences 2.6(2012): pp. 1-8
    Handle: RePEc:pra:mprapa:50669

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    Related research

    Keywords: Cap and Trade System; Carbon Tax; Climate Change.;

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    1. Newell, Richard G. & Pizer, William A., 2008. "Indexed regulation," Journal of Environmental Economics and Management, Elsevier, vol. 56(3), pages 221-233, November.
    2. Weitzman, Martin L, 1974. "Prices vs. Quantities," Review of Economic Studies, Wiley Blackwell, vol. 41(4), pages 477-91, October.
    3. Nicholas Linacre & Alexandre Kossoy & Philippe Ambrosi, . "State and Trends of the Carbon Market 2011," World Bank Other Operational Studies 13400, The World Bank.
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