Leakage, Welfare, and Cost-Effectiveness of Carbon PolicyAmerican Economic Review, Papers and Proceedings (2013)
AbstractWe extend the model of Fullerton et al (2012) to explore cost-effectiveness of unilateral climate policy in the presence of leakage. We ignore the welfare gain from reducing greenhouse gas emissions and focus on the welfare cost of the emissions tax or permit scheme. Whereas that prior paper solves for changes in emissions quantities and finds that leakage maybe negative, we show here that all cases with negative leakage in that model are cases where a unilateral carbon tax results in a welfare loss. With positive leakage, however, a unilateral policy can improve welfare.
- Carbon Policy
Publication DateMay, 2013
Citation InformationKathy Baylis, Don Fullerton and Daniel H. Karney. "Leakage, Welfare, and Cost-Effectiveness of Carbon Policy" American Economic Review, Papers and Proceedings (2013)
Available at: http://works.bepress.com/don_fullerton/66/