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CETA: A Model for Carbon Emissions Trajectory Assessment

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  • Stephen C. Peck
  • Thomas J. Teisberg

Abstract

We present an economic growth and energy use model incorporating representations of greenhouse gas accumulation, global mean temperature rise, and the damage cost associated with this temperature rise. Under alternative assumptions about the damage cost function, we find optimal time paths of CO2 emissions control and associated optimal carbon taxes. Our work indicates that with plausible assumptions, an optimal carbon tax will rise over time, in contrast to the “hump-shaped†carbon taxes implied by CO2 reduction policies currently being discussed. Our work also suggests that the damage cost function would have to be both high and nonlinear in order to justify the general level of CO2 control and carbon taxes implied by these policies.

Suggested Citation

  • Stephen C. Peck & Thomas J. Teisberg, 1992. "CETA: A Model for Carbon Emissions Trajectory Assessment," The Energy Journal, , vol. 13(1), pages 55-77, January.
    • Handle: RePEc:sae:enejou:v:13:y:1992:i:1:p:55-77
    DOI: 10.5547/ISSN0195-6574-EJ-Vol13-No1-4
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    References listed on IDEAS

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    1. Nordhaus, William, 1982. "How Fast Should We Graze the Global Commons?," American Economic Review, American Economic Association, vol. 72(2), pages 242-246, May.
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    Cited by:

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    3. Bhadury, Soumya & Pratap, Bhanu & Gajbhiye, Dhirendra, 2025. "Transition to a greener economy: Climate change risks and resilience in a state-space framework," Journal of Asian Economics, Elsevier, vol. 98(C).

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