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On Shibata'S Negation Of Lump-Sum Transfers In Global Warming Control: Rejoinder

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  • Hirofumi Shibata

Abstract

Kohn's criticism of my negation of the role of lump-sum transfers financed by a global emission tax is based on two unacceptable premises. (1) He assumes a world consisting of cooperative nations. But if nations were cooperative no corrective tax is needed as they could internalize external diseconomies without a super national governmental intervention. A global tax analysis must assume non-cooperative nations as I did. (2) He treats lump-sum transfers as negotiable payments for compliance by the country unfavorable affected by the tax. But the standard interpretation of the lump-sum transfers is payments that do not influence private economic decisions. In my analysis lump-sum transfers have their usual interpretation. This rejoinder also reinforces my original claim with a formal proof that every nation's post-tax welfare is independent of lump-sum transfers and of their aggregate resources. [F02, H23, Q23, Q25]

Suggested Citation

  • Hirofumi Shibata, 2001. "On Shibata'S Negation Of Lump-Sum Transfers In Global Warming Control: Rejoinder," International Economic Journal, Taylor & Francis Journals, vol. 17(1), pages 43-55.
    • Handle: RePEc:taf:intecj:v:17:y:2001:i:1:p:43-55
    DOI: 10.1080/10168730300080004
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    1. Shibata, Hirofumi, 1974. "Pareto-optimality and Gains-from-Trade: A Further Elucidation," Economica, London School of Economics and Political Science, vol. 41(161), pages 71-78, February.
    2. Buchanan, James M & Stubblebine, W C, 1972. "Pareto-Optimality and Gains-from-Trade: A Comment," Economica, London School of Economics and Political Science, vol. 39(154), pages 203-204, May.
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