Curbing Emissions through a Carbon Liabilities Market: A note from a climate skeptic's perspective
We argue for the creation of a carbon liabilities market to address climate change. Each period, countries would be made liable for their share of responsibility in current climate damage. Because liabilities could be traded like financial debt, robustness to strategic manipulations and efficiency ensue. Moreover, this decentralizes the choice of the rate by which countries discount future benefits and damage. Rather than being based on an expected discounted sum of future marginal damage (as with a carbon tax or tradable emission permits) our proposal relies only on observed realized damage and on the well-documented emission history of countries.
|Date of creation:||01 Feb 2014|
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- Steven Shavell, 2011. "Corrective Taxation versus Liability," American Economic Review, American Economic Association, vol. 101(3), pages 273-76, May.
- Hammond, Peter J, 1981. "Ex-ante and Ex-post Welfare Optimality under Uncertainty," Economica, London School of Economics and Political Science, vol. 48(191), pages 235-50, August.
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