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Seminar med Cathrine Hagem

SSB: Supply- versus demand-side policies in the presence of carbon leakage and the green paradox

Sted: Pilestredet 35, Rom: Pi531 Dato og tid: torsdag 12. oktober 2017 kl. 13.00 - 14.00

Abstract:  We consider a climate coalition which seeks to reduce global emissions in the presence of carbon leakage and resource exhaustibility. We show that credible announcement of future unilateral supply-side policies delays foreign emissions, and we derive the optimal combination of consumer taxes and producer taxes when leakages from free riders, both within periods and across periods, are considered. The tax shares generally differ over time. A decline in the present value of the social cost of carbon over time supports a time path where the consumer tax’s share of the total carbon tax also declines over time. We illustrate our findings with a numerical model.

(with Halvor Briseid Storrøsten)