The Case for Charges on Greenhouse Gas Emissions Harvard Environmental Economics Program

The proposal discussed in this paper is to levy a common charge on all emissions of greenhouse gases, worldwide. All countries would be covered in principle, but the proposal could be implemented with a much smaller number of countries, provided they covered most of the emissions. While all greenhouse gases should in principle be covered, this paper will address mainly carbon dioxide, quantitatively the most important greenhouse gas; extensions to other greenhouse gases could be made with little or (in the case of methane) much difficulty. The charge would be internationally adjusted from time to time, and each country would collect and keep the revenue it generated. This paper will discuss in turn the motivation for such a proposal, how it would be implemented, its likely economic effects, the relationship to energy security, the possibility of mixing an emission charge with other schemes to limit emissions, especially “cap-and-trade” schemes, and the negotiability of such an agreement. The Case for Charges on Greenhouse Gas Emissions Richard N. Cooper Harvard University