Carbon tax and OPEC's rents under a ceiling constraint
We study the Markov-perfect Nash equilibrium (MPNE) of a game between oil-importing countries, who seek to maintain the atmospheric carbon concentration under a given ceiling, and oil-exporting countries. The oil-importing countries set a carbon tax and the oil-exporting countries control the producer price. We obtain implicit feedback rules and explicit non-linear time paths of extraction, carbon tax, and producer price. Consumers are always able to reap some share of the scarcity and monopoly rents, whereas producers partially pre-empt the carbon tax only if the marginal damage under the ceiling is small. We compare the MPNE to the efficient, open-loop, and cartel-without-tax equilibria.
|Date of creation:||2011|
|Date of revision:|
|Note:||View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00976591|
|Contact details of provider:|| Web page: https://hal.archives-ouvertes.fr/|
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.:
- Dockner Engelbert J. & Van Long Ngo, 1993. "International Pollution Control: Cooperative versus Noncooperative Strategies," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages 13-29, July.
- Colin Rowat, 2005.
"Non-Linear Strategies in a Linear Quadratic Differential Game,"
05-05, Department of Economics, University of Birmingham.
- Rowat, Colin, 2007. "Non-linear strategies in a linear quadratic differential game," Journal of Economic Dynamics and Control, Elsevier, vol. 31(10), pages 3179-3202, October.
- Colin Rowat, 2005. "Non-linear strategies in a linear quadratic differential game," GE, Growth, Math methods 0502001, EconWPA.
- Ujjayant CHAKRAVORTY & Bertrand MAGNE & Michel MOREAUX, 2006. "Plafond de concentration en carbone et substitutions entre ressources énergétiques," Annales d'Economie et de Statistique, ENSAE, issue 81, pages 141-168.
- Chakravorty, Ujjayant & Magné, Bertrand & Moreaux, Michel, 2005.
"A Hotelling Model with a Ceiling on the Stock of Pollution,"
IDEI Working Papers
368, Institut d'Économie Industrielle (IDEI), Toulouse.
- Chakravorty, Ujjayant & Magne, Bertrand & Moreaux, Michel, 2006. "A Hotelling model with a ceiling on the stock of pollution," Journal of Economic Dynamics and Control, Elsevier, vol. 30(12), pages 2875-2904, December.
- Ujjayant Chakravorty & Bertrand Magne & Michel Moreaux, 2003. "A Hotelling Model with a Ceiling on the Stock of Pollution," Emory Economics 0321, Department of Economics, Emory University (Atlanta).
- Rubio, Santiago J. & Escriche, Luisa, 2001.
"Strategic pigouvian taxation, stock externalities and polluting non-renewable resources,"
Journal of Public Economics,
Elsevier, vol. 79(2), pages 297-313, February.
- Santiago J. Rubio & Luisa Escriche, 1998. "- Strategic Pigouvian Taxation, Stock Externalities And Polluting Non-Renewable Resources," Working Papers. Serie EC 1998-23, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Liski, Matti & Tahvonen, Olli, 2004. "Can carbon tax eat OPEC's rents?," Journal of Environmental Economics and Management, Elsevier, vol. 47(1), pages 1-12, January.
- Tahvonen, Olli, 1996. "Trade with Polluting Nonrenewable Resources," Journal of Environmental Economics and Management, Elsevier, vol. 30(1), pages 1-17, January.
- Franz Wirl, 1995. "The exploitation of fossil fuels under the threat of global warming and carbon taxes: A dynamic game approach," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 5(4), pages 333-352, June.
- Wirl, Franz, 2007. "Do multiple Nash equilibria in Markov strategies mitigate the tragedy of the commons?," Journal of Economic Dynamics and Control, Elsevier, vol. 31(11), pages 3723-3740, November.
When requesting a correction, please mention this item's handle: RePEc:hal:cesptp:halshs-00976591. 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: (CCSD)
If references are entirely missing, you can add them using this form.