Abstract
This paper finds that optimal international carbon taxes are country specific and we can decompose a tax on a domestically produced carbon-intensive commodity into a revenue tax, a tax to control local atmospheric pollution and an international carbon tax. It shows that an institutional arrangement for the world economy similar to the fiscal federalism in the federal countries can be useful to internalize the global externalities of atmospheric pollution.
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Murty, M.N. Fiscal federalism approach for controlling global environmental pollution. Environmental and Resource Economics 8, 449–459 (1996). https://doi.org/10.1007/BF00357413
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DOI: https://doi.org/10.1007/BF00357413