Climate Effects of Carbon Taxes, Taking into Account Possible Other Future Climate Measures

34 Pages Posted: 8 Apr 2011

See all articles by Florian Habermacher

Florian Habermacher

University of St. Gallen (HSG)

Gebhard Kirchgässner

Universität St. Gallen; CESifo (Center for Economic Studies and Ifo Institute)

Multiple version iconThere are 2 versions of this paper

Date Written: March 31, 2011

Abstract

The increase of fuel extraction costs as well as of temperature will make it likely that in the medium-term future technological or political measures against global warming may be implemented. In assessments of a current climate policy the possibility of medium-term future developments like backstop technologies is largely neglected but can crucially affect its impact. Given such a future measure, a currently introduced carbon tax may more generally mitigate climate change than recent reflections along the line of the Green Paradox would suggest. Notably, the weak and the strong version of the Green Paradox, related to current and longer-term emissions, may not materialize. Moreover, the tax may allow the demanding countries to extract part of the resource rent, further increasing its desirability.

Keywords: climate change policy, greenhouse gas tax, carbon tax, Green Paradox, anticipation effects, exhaustible resources, fossil fuels market, backstop technology, uncertainty, resource rent

JEL Classification: Q540, Q310, Q380, Q410, Q420

Suggested Citation

Habermacher, Florian and Kirchgaessner, Gebhard, Climate Effects of Carbon Taxes, Taking into Account Possible Other Future Climate Measures (March 31, 2011). CESifo Working Paper Series No. 3404, Available at SSRN: https://ssrn.com/abstract=1803115 or http://dx.doi.org/10.2139/ssrn.1803115

Florian Habermacher

University of St. Gallen (HSG) ( email )

Rosenbergstrasse 51
St. Gallen, St. Gallen CH-9000
Switzerland

HOME PAGE: http://www.siaw.unisg.ch/habermacher

Gebhard Kirchgaessner (Contact Author)

Universität St. Gallen ( email )

SIAW, Bodanstrasse 8
CH-9000 St.Gallen
Switzerland
+41 71 224 23 47 (Phone)
+41 71 224 22 98 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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