Leviathan carbon taxes in the short run
- 457 Downloads
A cap is imposed on the carbon tax rate if the total tax revenue is not allowed to increase. Using recent data on the carbon-intensity of the economy and the overall tax take, I show that this cap constrains almost any climate policy in at least some countries. A larger number of countries, emitting a substantial share of global carbon dioxide, cannot fully participate if the carbon tax (or equivalent alternative regulation) is high enough to meet the 2 °C target. For that target, the carbon tax revenue in 2020 is greater than 10 % of total tax revenue in every country.
- Baumol WJ (1972) On taxation and the control of externalities. Am Econ Rev 62(3):307–322Google Scholar
- Baumol WJ, Oates WE (1971) The use of standards and prices for the protection of the environment. Scand J Econ 73(1):42–54Google Scholar
- Hobbes T (1651) Leviathan or the matter, forme and power of a common wealth ecclesiasticall and civil. Andrew Crooke and William Cooke, LondonGoogle Scholar
- Rausch S, Metcalf GE, M.Reilly J, and Paltsev S (2010) Distributional implications of alternative U.S. greenhouse gas control measures. B.E.J Econ Anal Policy 10(2)Google Scholar
- Stern NH, Peters S, Bakhski V, Bowen A, Cameron C, Catovsky S, Crane D, Cruickshank S, Dietz S, Edmondson N, Garbett S-L, Hamid L, Hoffman G, Ingram D, Jones B, Patmore N, Radcliffe H, Sathiyarajah R, Stock M, Taylor C, Vernon T, Wanjie H, Zenghelis D (2006) Stern review: The economics of climate change. Cambridge University Press, CambridgeGoogle Scholar