Arbeitspapier
Climate Policy Enhances Efficiency: A Macroeconomic Portfolio Effect
Carbon pricing regulates emission flows and collects rents from underlying fossil resource stocks. The resulting investment shift implies lower climate policy costs and improved welfare if capital is underaccumulated. We prove that under emission trading, such a beneficial macroeconomic portfolio effect between fossil stocks and capital is induced if some permits are auctioned. Alternatively, a carbon tax also induces a portfolio effect, but cannot simultaneously implement a given mitigation path and collect an arbitrary rent share. Finally, treating the right to recurrently receive a share of total emission permits as a tradable asset is formally, but not politically equivalent.
- Language
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Englisch
- Bibliographic citation
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Series: CESifo Working Paper ; No. 5161
- Classification
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Wirtschaft
Investment; Capital; Intangible Capital; Capacity
Taxation and Subsidies: Efficiency; Optimal Taxation
Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Nonrenewable Resources and Conservation: General
Climate; Natural Disasters and Their Management; Global Warming
- Subject
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carbon pricing
resource rent taxation
overlapping generations
capital underaccumulation
- Event
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Geistige Schöpfung
- (who)
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Siegmeier, Jan
Mattauch, Linus
Edenhofer, Ottmar
- Event
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Veröffentlichung
- (who)
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Center for Economic Studies and ifo Institute (CESifo)
- (where)
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Munich
- (when)
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2015
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
This object is provided by:
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Siegmeier, Jan
- Mattauch, Linus
- Edenhofer, Ottmar
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2015
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