Complementary taxation of carbon emissions and local air pollution

Arbeitspapier

Current decarbonization policies neglect damages from local air pollutants. We analyze the trade-off between complementary taxation of carbon emissions and local air pollution. We quantify results for the European power market until 2050. Taxing only air pollution results in social cost of 5,890 billion € and fosters nuclear deployment. Taxing only carbon yields social cost of 716 billion € and promotes CCS deployment. Taxing both yields cost of 1,118 billion €. Moderate carbon taxation can be complementary to a primary policy of air pollution abatement. On the contrary, a primary policy of decarbonization stands in trade-off with air pollution abatement in the long-term.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ifo Working Paper ; No. 375

Classification and Topics

• Classification: Wirtschaft ; Optimization Techniques; Programming Models; Dynamic Analysis ; Taxation and Subsidies: Efficiency; Optimal Taxation ; Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies ; Project Evaluation; Social Discount Rate ; Electric Utilities
• Subject: Taxation ; social cost ; air pollution ; carbon emission ; externality ; energy system model ; power market model ; decarbonization

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Mier, Mathias ; Adelowo, Jacqueline ; Weissbart, Christoph
• Event: Veröffentlichung
• (who): ifo Institute - Leibniz Institute for Economic Research at the University of Munich
• (where): Munich
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/263164
• Last update: 10.03.2025, 11:42 AM CET