Abstract Carbon taxes or similar pricing instruments could play a crucial role in helping countries decarbonise their economies. No country has single carbon price that applies to all greenhouse gas emissions. The UK is typical having adopted complex patchwork of policies raise the cost different polluting activities degrees, resulting implied vary greatly across sources We document and quantif...

Carbon emissions abatement in a group of countries can result in increased emissions in non-abating countries. This effect has been referred to as carbon leakage. The Kyoto Agreement calls for a number of industrialized countries to limit their emissions while other countries have no abatement commitments. This paper assesses the sectoral determinants of the leakage in a static multi-sector, mu...

Uncertainty plays a significant role in evaluating climate policy, and fat-tailed uncertainty may dominate policy advice. Should we make our utmost effort to prevent the arbitrarily large impacts of climate change under deep uncertainty? In order to answer to this question, we propose a new way of investigating the impact of (fat-tailed) uncertainty on optimal climate policy: the curvature of t...

We analyze non-cooperative environmental policy when the only strategic interaction between countries is through bilateral transboundary pollution, i.e., countries are closed or small open economies. When countries set pollution taxes simultaneously, there is no carbon leakage. However, in the sequential-move game, the leader sets its pollution tax lower than the marginal damage from own pollut...

We develop a two-region partial equilibrium model of the global market for liquid fuel and analyze different policies, such as biofuel mandate, emission standard, and fuel carbon tax. We rank these policies under different criteria, such as greenhouse-gas (GHG) emissions, expenditure on fuel imports, the impact on fuel consumers and producers, the quantity of biofuel, etc. Our analysis suggests...

This paper aims at clearing up some misunderstandings about the social impacts of carbon taxes that proved to be a decisive obstacle to their further consideration in public debates. It highlights the gap between the cost of a carbon tax reform as it is spontaneously perceived by the taxpayers and the reality of its ultimate consequences: the real impact on households’ poverty and inequalities ...