TEL  Vol.4 No.1 , February 2014
Can a Carbon Tax Be Effective without a Grand Coalition?
Author(s) Amnon Levy
ABSTRACT

This paper analyzes an interaction between a carbon-tax collecting and investing coalition of rich countries, abstaining rich countries and poor countries. The non-coalition countries may suffer from loss of reputation and guilt and may overstate the emission-moderating effect of the carbon tax. As long as these three types of countries react to their counterparts’ emissions, taxing carbon-dioxide emissions unilaterally does not necessarily reduce the global emissions. Nor does it necessarily moderate the emissions of the coalition.


Cite this paper
A. Levy, "Can a Carbon Tax Be Effective without a Grand Coalition?," Theoretical Economics Letters, Vol. 4 No. 1, 2014, pp. 12-18. doi: 10.4236/tel.2014.41003.
References
[1]   R. H. Coase, “The Problem of Social Cost,” Journal of Law and Economics, Vol. 3, No. 1, 1960, pp. 1-44.
http://dx.doi.org/10.1086/466560

[2]   L. S. Shapley and M. Shubik, “Quasi-Cores in a Monetary Economy with Non-Convex Preferences,” Econometrica, Vol. 34, No. 4, 1966, pp. 805-827.
http://dx.doi.org/10.2307/1910101

[3]   M. L. Weitzman, “Prices vs. Quantities,” Review of Economic Studies, Vol. 41, No. 4, 1974, pp. 477-491.
http://dx.doi.org/10.2307/2296698

[4]   W. A. Pizer, “Combining Price and Quantity Controls to Mitigate Global Climate Change,” Journal of Public Economics, Vol. 85, No. 3, 2002, pp. 409-434.
http://dx.doi.org/10.1016/S0047-2727(01)00118-9

[5]   M. Hoel and L. Karp,“Taxes versus Quotas for a Stock Pollutant,” Resource and Energy Economics, Vol. 24, No. 4, 2002, pp. 367-384.
http://dx.doi.org/10.1016/S0928-7655(02)00014-3

[6]   R. G. Newell and W. A. Pizer, “Regulating Stock Externalities under Uncertainty,” Journal of Environmental Economics and Management, Vol. 45, No. 2, 2003, pp. 416-432.
http://dx.doi.org/10.1016/S0095-0696(02)00016-5

[7]   C. Fischer and R.G. Newell, “Environmental and Technology Policies for Climate Mitigation,” Journal of Environmental Economics and Management, Vol. 55, No. 2, 2008, pp. 142-162.
http://dx.doi.org/10.1016/j.jeem.2007.11.001

[8]   T. M. Selden and D. Song, “Environmental Quality and Development: Is There a Kuznets Curve for Air Pollution Emissions?” Journal of Environmental Economics and Management, Vol. 27, No. 2, 1994, pp. 147-162.
http://dx.doi.org/10.1006/jeem.1994.1031

[9]   G. M. Grossman and A. B. Krueger, “Economic Growth and the Environment,” Quarterly Journal of Economics, Vol. 110, No. 2, 1995, pp. 353-377.
http://dx.doi.org/10.2307/2118443

[10]   A. Diekmann and A. Franzen, “The Wealth of Nations and Environmental Concern,” Environment and Behavior, Vol. 31, No. 4, 1999, pp. 540-549.
http://dx.doi.org/10.1177/00139169921972227

[11]   A. Franzen, “Environmental Attitudes in International Comparison: An Analysis of the ISSP Surveys 1993 and 2000,” Social Science Quarterly, Vol. 84, No. 2, 2003, pp. 297-308.
http://dx.doi.org/10.1111/1540-6237.8402005

 
 
Top