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A time-varying carbon tax to protect the environment while safeguarding the economy

In: Combating Climate Change: A CEPR Collection

Author

Listed:
  • Ghassane, Benmir
  • Jaccard, Ivan
  • Vermandel, Gauthier

Abstract

Climate change is one of the most pressing issues of our time. The challenge for policymakers is that climate policies could have a negative impact on the economy in the short term. In this article we discuss how this trade-off between fighting climate change and ensuring a stable business cycle affects the design of environmental policies. We argue in favour of a time-varying carbon tax that is increased during booms and decreased during recessions. JEL Classification: Q58, G12, E32
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Ghassane, Benmir & Jaccard, Ivan & Vermandel, Gauthier, 2021. "A time-varying carbon tax to protect the environment while safeguarding the economy," CEPR Press Book Chapters, in: Weder di Mauro, Beatrice (ed.), Combating Climate Change: A CEPR Collection, edition 1, volume 1, chapter 16, Centre for Economic Policy Research.
    • Handle: RePEc:cpr:ebchap:p347-16
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    JEL classification:

    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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