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Certainty and Uncertainty in Cap and Trade System or in Carbon Tax for Green Accounting to Decrease Greenhouse gas Emissions

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  • Mohajan, Haradhan

Abstract

This paper analyzes the price or quantity controls of greenhouse gases in the presence of uncertain costs. The greenhouse gases are a stock pollutant in the environment. Hence, the marginal benefit curve must be relatively flat which indicates to establish the preference of a price control over a quantity control. In the case of permanent shocks, the traditional comparison of marginal benefits versus marginal costs cannot be measured accurately. The choice between quantity and price controls becomes ambiguous and depends upon a more difficult measurement of marginal costs and benefits. The aim of the paper is to impose taxes to reduce greenhouse gas emissions.

Suggested Citation

  • Mohajan, Haradhan, 2012. "Certainty and Uncertainty in Cap and Trade System or in Carbon Tax for Green Accounting to Decrease Greenhouse gas Emissions," MPRA Paper 50669, University Library of Munich, Germany, revised 20 Dec 2012.
  • Handle: RePEc:pra:mprapa:50669
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    File URL: https://mpra.ub.uni-muenchen.de/50669/1/MPRA_paper_50669.pdf
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    References listed on IDEAS

    as
    1. Martin L. Weitzman, 1974. "Prices vs. Quantities," Review of Economic Studies, Oxford University Press, vol. 41(4), pages 477-491.
    2. Newell, Richard G. & Pizer, William A., 2008. "Indexed regulation," Journal of Environmental Economics and Management, Elsevier, vol. 56(3), pages 221-233, November.
    3. Calel, Raphael, 2011. "Climate change and carbon markets: a panoramic history," LSE Research Online Documents on Economics 37397, London School of Economics and Political Science, LSE Library.
    4. Baumol,William J. & Oates,Wallace E., 1988. "The Theory of Environmental Policy," Cambridge Books, Cambridge University Press, number 9780521322249.
    5. Mohajan, Haradhan, 2011. "Greenhouse gas emissions increase global warming," MPRA Paper 50839, University Library of Munich, Germany, revised 18 Apr 2011.
    6. Nicholas Linacre & Alexandre Kossoy & Philippe Ambrosi, "undated". "State and Trends of the Carbon Market 2011," World Bank Other Operational Studies 13400, The World Bank.
    7. Haradhan Kumar Mohajan, 2011. "Optimal Environmental Taxes Due to Health Effect," KASBIT Business Journals, Khadim Ali Shah Bukhari Institute of Technology (KASBIT), vol. 4, pages 1-19, December.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Mohajan, Haradhan, 2012. "Greenhouse Gas Emissions of the USA," MPRA Paper 50670, University Library of Munich, Germany, revised 21 Nov 2012.

    More about this item

    Keywords

    Cap and Trade System; Carbon Tax; Climate Change.;

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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