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:|
|Publication status:||Published in Scandinavian Journal of Economics, Wiley, 2011, 113 (4), pp.798-824|
|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/|
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