Arbeitspapier
Optimal Energy Taxes and Subsidies under a Cost-Effective Unilateral Climate Policy: Addressing Carbon Leakage
We analyze how a country pursuing a unilateral climate policy may contribute to a reduction in global CO2 emissions in a cost-effective way. To do so its system of energy taxes and subsidies must account for leakage of emissions from the domestic to the foreign economy. We focus on leakage occurring via international trade in electricity and via shifts between domestic and foreign production of other goods. The optimal tax-subsidy scheme is based on an intuitive principle: Impose a uniform carbon tax on all additions to global emissions caused by changes in domestic production and consumption of energy, including additions to emissions occurring via shifts in international trade. Emissions from the sector exposed to foreign competition should be taxed at reduced rates to avoid excessive carbon leakage, and a part of the carbon tax on electricity should be levied at the consumer rather than the producer level to ensure taxation of the carbon content of imported electricity. Producers of renewables-based electricity should receive a subsidy to internalize their contribution to the reduction of global emissions. In other sectors emissions should be taxed at a uniform rate corresponding to the marginal social cost of meeting the target for emissions reduction. Simulations calibrated to data for the Danish economy suggest that redesigning energy taxes and subsidies to account for carbon leakage can generate a welfare gain.
- Sprache
-
Englisch
- Erschienen in
-
Series: CESifo Working Paper ; No. 7920
- Klassifikation
-
Wirtschaft
Taxation and Subsidies: Efficiency; Optimal Taxation
Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Energy: Government Policy
Climate; Natural Disasters and Their Management; Global Warming
- Thema
-
optimal unilateral climate policy
carbon leakage
optimal energy taxes and subsidies
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Kruse-Andersen, Peter Kjær
Sørensen, Peter Birch
- Ereignis
-
Veröffentlichung
- (wer)
-
Center for Economic Studies and ifo Institute (CESifo)
- (wo)
-
Munich
- (wann)
-
2019
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Kruse-Andersen, Peter Kjær
- Sørensen, Peter Birch
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2019
Ähnliche Objekte (12)
Cost-effective unilateral climate policy design: Size Matters
Flattening the carbon extraction path in unilateral costeffective action
Flattening the carbon extraction path in unilateral cost-effective action
Unilateral Climate Policy: Can OPEC resolve the Leakage Probem?
Carbon Leakage Revisited: Unilateral Climate Policy with Directed Technical Change
Can Degrowth Overcome the Leakage Problem of Unilateral Climate Policy?
Robust Policies against Emission Leakage: The Case for Upstream Subsidies
Opimal Unilateral Climate Policy with Carbon Leakage at the Extensive and the Intensive Margin
Sector Coupling and Negative Leakage – Unilateral Climate Policies in the Presence of an ETS
Unilateral climate policy, asymmetric backstop adoption and carbon leakage in a two-region Hotelling model
Unilateral climate policy, asymmetric backstop adoption, and carbon leakage in a two-region hotelling model
A Note on Externality Benefits and the Feasibilty of Pareto Optimality through Unilateral Subsidies
Cost-effective unilateral climate policy design: Size Matters
Flattening the carbon extraction path in unilateral costeffective action
Flattening the carbon extraction path in unilateral cost-effective action
Unilateral Climate Policy: Can OPEC resolve the Leakage Probem?
Carbon Leakage Revisited: Unilateral Climate Policy with Directed Technical Change
Can Degrowth Overcome the Leakage Problem of Unilateral Climate Policy?
Robust Policies against Emission Leakage: The Case for Upstream Subsidies
Opimal Unilateral Climate Policy with Carbon Leakage at the Extensive and the Intensive Margin
Sector Coupling and Negative Leakage – Unilateral Climate Policies in the Presence of an ETS
Unilateral climate policy, asymmetric backstop adoption and carbon leakage in a two-region Hotelling model
Unilateral climate policy, asymmetric backstop adoption, and carbon leakage in a two-region hotelling model
A Note on Externality Benefits and the Feasibilty of Pareto Optimality through Unilateral Subsidies
Cost-effective unilateral climate policy design: Size Matters
Flattening the carbon extraction path in unilateral costeffective action
Flattening the carbon extraction path in unilateral cost-effective action
Unilateral Climate Policy: Can OPEC resolve the Leakage Probem?
Carbon Leakage Revisited: Unilateral Climate Policy with Directed Technical Change
Can Degrowth Overcome the Leakage Problem of Unilateral Climate Policy?
Robust Policies against Emission Leakage: The Case for Upstream Subsidies
Opimal Unilateral Climate Policy with Carbon Leakage at the Extensive and the Intensive Margin
Sector Coupling and Negative Leakage – Unilateral Climate Policies in the Presence of an ETS
Unilateral climate policy, asymmetric backstop adoption and carbon leakage in a two-region Hotelling model
Unilateral climate policy, asymmetric backstop adoption, and carbon leakage in a two-region hotelling model