Sustainable Climate Treaties

Arbeitspapier

We examine a global refunding scheme for mitigating climate change. Countries pay an initial fee into a global fund that is invested in long-run assets. In each period, part of the fund is distributed among the participating countries in relation to the emission reductions they have achieved in this period. We identify two possible types of sustainable treaty. A first-best sustainable treaty involves varying amounts of refunded wealth and a minimal amount of initial fees inducing socially desirable abatement efforts in each period. In a secondbest sustainable treaty with only two parameters – optimally selected initial fees and constant refunds equal to the interest earned on the fund – the stock of greenhouse gases converges to the socially optimal stock. Finally, we suggest ways for countries to raise money for the payment of initial fees that are neutral to tax payers and international capital markets.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Economics Working Paper Series ; No. 11/146

Classification and Topics

• Classification: Wirtschaft ; Climate; Natural Disasters and Their Management; Global Warming ; Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies ; Public Goods
• Subject: climate change mitigation ; refunding scheme ; international agreements ; sustainable treaty ; Klimawandel ; Umweltabkommen ; Nachhaltigkeit ; Rechtsdurchsetzung ; Umweltabgabe ; International ; Theorie

Contributors, Location and Time

• Event: Geistige Schöpfung
• (who): Gersbach, Hans ; Hummel, Noemi ; Winkler, Ralph
• Event: Veröffentlichung
• (who): ETH Zurich, CER-ETH - Center of Economic Research
• (where): Zurich
• (when): 2011

Further information

• DOI: doi:10.3929/ethz-a-006512350
• Handle: http://hdl.handle.net/10419/171589
• Last update: 10.03.2025, 11:43 AM CET