Energy Balance Climate Models and the Spatial Structure of Optimal Mitigation Policies
We develop a one-dimensional energy balance climate model with heat transportation across locations. We introduce the concept of potential world GDP at time t, and we introduce, through the temperature function, spatial characteristics into the damage function which make damages latitude dependent. We solve the social planner’s problem and characterize the competitive equilibrium. We define optimal taxes on fossil fuels and profit taxes on firms that extract fossil fuels. Our results suggest that if the implementation of international transfers across latitudes is not possible, then optimal taxes are spatially non homogeneous and tend to be lower at the poor latitudes. The degree of spatial differentiation of optimal taxes depend on heat transportation. We also locate sufficient conditions for optimal mitigation policies to have rapid ramp-up initially and then decrease over time. By employing the properties of the spatial model and approximating solutions, we show how to study the impact of thermal transport across latitudes on welfare inequality.
|Date of creation:||Jan 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.feem.it/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Michael Keen & Christos Kotsogiannis, 2011.
"Coordinating Climate and Trade Policies: Pareto Efficiency and the Role of Border Tax Adjustments,"
CESifo Working Paper Series
3494, CESifo Group Munich.
- Keen, Michael & Kotsogiannis, Christos, 2014. "Coordinating climate and trade policies: Pareto efficiency and the role of border tax adjustments," Journal of International Economics, Elsevier, vol. 94(1), pages 119-128.
- Michael Keen & Christos Kotsogiannis, 2012. "Coordinating Climate and Trade Policies; Pareto Efficiency and the Role of Border Tax Adjustments," IMF Working Papers 12/289, International Monetary Fund.
- Michael Keen & Christos Kotsogiannis, 2011. "Coordinating Climate and Trade Policies: Pareto Efficiency and the Role of Border Tax Adjustments," Discussion Papers 1106, Exeter University, Department of Economics.
- Per Krusell & Toshihiko Mukoyama & Richard Rogerson & Aysegul Sahin, 2009.
"A Three State Model of Worker Flows in General Equilibrium,"
NBER Working Papers
15251, National Bureau of Economic Research, Inc.
- Krusell, Per & Mukoyama, Toshihiko & Rogerson, Richard & Sahin, Aysegül, 2011. "A three state model of worker flows in general equilibrium," Journal of Economic Theory, Elsevier, vol. 146(3), pages 1107-1133, May.
- Krusell, Per & Mukoyama, Toshihiko & Rogerson, Richard & Sahin, Aysegul, 2009. "A Three State Model of Worker Flows in General Equilibrium," CEPR Discussion Papers 7425, C.E.P.R. Discussion Papers.
- Golosov, Mikhail & Hassler, John & Krusell, Per & Tsyvinski, Aleh, 2011.
"Optimal taxes on fossil fuel in general equilibrium,"
CEPR Discussion Papers
8527, C.E.P.R. Discussion Papers.
- Mikhail Golosov & John Hassler & Per Krusell & Aleh Tsyvinski, 2014. "Optimal Taxes on Fossil Fuel in General Equilibrium," Econometrica, Econometric Society, vol. 82(1), pages 41-88, 01.
- Mikhail Golosov & John Hassler & Per Krusell & Aleh Tsyvinski, 2011. "Optimal Taxes on Fossil Fuel in General Equilibrium," NBER Working Papers 17348, National Bureau of Economic Research, Inc.
- Graciela Chichilnisky & Geoffrey Heal, 1993.
"Who Should Abate Carbon Emissions? An International Viewpoint,"
NBER Working Papers
4425, National Bureau of Economic Research, Inc.
- Chichilnisky, Graciela & Heal, Geoffrey, 1994. "Who should abate carbon emissions? : An international viewpoint," Economics Letters, Elsevier, vol. 44(4), pages 443-449, April.
- Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2008. "Climate Change and Economic Growth: Evidence from the Last Half Century," NBER Working Papers 14132, National Bureau of Economic Research, Inc.
- Geoffrey Heal, 2009. "Climate Economics: A Meta-Review and Some Suggestions for Future Research," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 3(1), pages 4-21, Winter.
- Thomas Sterner & U. Martin Persson, 2008. "An Even Sterner Review: Introducing Relative Prices into the Discounting Debate," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 2(1), pages 61-76, Winter.
When requesting a correction, please mention this item's handle: RePEc:fem:femwpa:2012.05. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (barbara racah)
If references are entirely missing, you can add them using this form.