Carbon Taxes and Climate Commitment with Non-constant Time Preference

Numerical Analysis of Non-constant Pure Rate of Time Preference: a Model of Climate Policy∗

When current decisions affect welfare in the far-distant future, as with climate change, the use of a declining pure rate of time preference (PRTP) provides potentially important modeling flexibility. The difficulty of analyzing models with non-constant PRTP limits their application. We describe and provide software (available online) to implement an algorithm to numerically obtain a Markov Per...

Climate change. Carbon trading over taxes.

, 1670 (2007); 315 Science et al. William Chameides, CLIMATE CHANGE: Carbon Trading Over Taxes www.sciencemag.org (this information is current as of March 23, 2007 ): The following resources related to this article are available online at http://www.sciencemag.org/cgi/content/full/315/5819/1670 version of this article at: including high-resolution figures, can be found in the online Updated inf...

Climate policies with non-constant discounting

We consider the climate-policy implications of non-constant time preferences when there is no commitment to future policies. The conceptual and quantitative results follow from the observation that, with time-declining discounting, the unusual delays and persistence of climate impacts provide a commitment device for climate policy-makers, overturning a fundamental climate-policy conclusion from...

Trade and Carbon Taxes

Public debt and optimal taxes without commitment

Benhabib and Rustichini [Optimal taxes without commitment, J. Econ. Theory 77 (1997) 231–259] study the properties of optimal capital taxes in economies without commitment and no government debt. They find that capital taxes may be different from zero at steady state. This note shows that, once governments have the possibility of issuing debt and smoothing taxes over time, optimal steady state ...