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Climate Clubs With Tax Revenue Recycling, Tariffs, And Transfers

Author

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  • DAIGEE SHAW

    (Institute of Economics, Academia Sinica, Taiwan)

  • YU-HSUAN FU

    (Institute of Economics, Academia Sinica, Taiwan)

Abstract

The E3ME-FTT model is applied to assess the impacts of alternative climate club structures. We consider two kinds of climate club memberships: the World Climate Club (WCC), where every country in the world joins the club, and the Core Climate Club (CCC), with seven likely club members: EU+5, Japan, South Korea, Canada, Brazil, Mexico, and Australia. First, we find that both the WCC and domestic revenue-neutral recycling matter a lot. The global CO2 emissions in 2050 could be reduced by 50% from BAU under the WCC. With domestic revenue-neutral recycling, there will be large positive impacts on GDP under both the WCC and the CCC. Secondly, the negative effects of trade sanctions on cumulative global GDP and global CO2 emissions make it unwelcome to be used as part of the club design. Lastly, the introduction of international transfers will result in a win–win solution that will not only increase the cumulative global GDP and reduce global CO2 emissions but also enhance the equality among club members and induce more likely participation in the climate club.

Suggested Citation

  • Daigee Shaw & Yu-Hsuan Fu, 2020. "Climate Clubs With Tax Revenue Recycling, Tariffs, And Transfers," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 11(04), pages 1-14, November.
    • Handle: RePEc:wsi:ccexxx:v:11:y:2020:i:04:n:s2010007820400084
    DOI: 10.1142/S2010007820400084
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    Cited by:

    1. Feng, Chun-Chiang & Chang, Kuei-Feng & Lin, Jin-Xu & Lee, Tsung-Chen & Lin, Shih-Mo, 2022. "Toward green transition in the post Paris Agreement era: The case of Taiwan," Energy Policy, Elsevier, vol. 165(C).
    2. Tingzhu Li & Debin Du & Xueli Wang & Xionghe Qin, 2022. "Can Nuclear Power Products Mitigate Greenhouse Gas Emissions? Evidence from Global Trade Network," IJERPH, MDPI, vol. 19(13), pages 1-25, June.

    More about this item

    Keywords

    Climate club; carbon tax; revenue recycling; tariff; international transfer;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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