Quotation van der Ploeg, Frederick, Rezai, Armon. Forthcoming. Cumulative emissions, untapped tapped fossil fuel and the optimal carbon tax. Technological Forecasting and Social Change 116, 216-222.


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Abstract

A stylised analytical framework is used to show how the global carbon tax and the amount of untapped fossil fuel can be calculated from a simple rule given estimates of society's rate of time impatience and intergenerational inequality aversion, the extraction cost technology, the rate of technical progress in renewable energy and the future trend rate of economic growth. The predictions of the simple framework are tested in a calibrated numerical and more complex version of the integrated assessment model (IAM). This IAM makes use of the Oxford carbon cycle of Allen et al. (2009), which differs from DICE, FUND and PAGE in that cumulative emissions are the key driving force of changes in temperature. We highlight the importance of the speed and direction of technological change for the energy transition and how time impatience, intergenerational inequality aversion and expected trend growth affect the time paths of the optimal global carbon tax and the optimal amount of fossil fuel reserves to leave untapped. We also compare these with the adverse global warming trajectories that occur if no policy actions are taken.

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Publication's profile

Affiliation WU
Type of publication Journal article
Journal Technological Forecasting and Social Change
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new INF-A, STRAT-B, WH-B
Language English
Title Cumulative emissions, untapped tapped fossil fuel and the optimal carbon tax
Volume 116
Year 2017
Page from 216
Page to 222
Reviewed? Y
URL http://www.sciencedirect.com/science/article/pii/S0040162516304772
DOI http://dx.doi.org/10.1016/j.techfore.2016.10.016

Associations

People
Rezai, Armon (Details)
External
van der Ploeg, Frederick (University of Oxford, United Kingdom)
Organization
Institute for Ecological Economics IN (Details)
Economics of Inequality FI (Details)
Research areas (Ă–STAT Classification 'Statistik Austria')
2928 Environmental economics (Details)
5325 Political economics (Details)
5334 Political economic policy (Details)
5335 Political economic theory (Details)
5341 Economic policy (Details)
5353 Environmental economics (Details)
5924 Environmental economics (Details)
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