Implicit carbon prices: Making do with the taxes we have

Climate and fiscal policy interact closely. The former imposes explicit prices for carbon emissions, while the latter affects emissions implicitly. We study the correspondence between explicit and implicit carbon pricing of a Ramsey-optimal fiscal policy in a neoclassical growth model of climate...

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Detalles Bibliográficos
Autores principales: Belfiori, Elisa, Rezai, Armon
Formato: Artículo publishedVersion
Lenguaje:Español
Publicado: Journal of Environmental Economics and Management (Online ISSN: 1096-0449) 2024
Materias:
Fiscal policy
Política Fiscal
Optimal taxation
Tributación óptima
Tax equivalence
Implicit carbon prices
Acceso en línea:https://repositorio.utdt.edu/handle/20.500.13098/12492
Aporte de:
Repositorio Digital Universidad Torcuato Di Tella de Universidad Torcuato Di Tella
id I57-R163-20.500.13098-12492
record_format dspace
spelling I57-R163-20.500.13098-124922024-03-20T07:00:18Z Implicit carbon prices: Making do with the taxes we have Belfiori, Elisa Rezai, Armon Fiscal policy Política Fiscal Optimal taxation Tributación óptima Tax equivalence Implicit carbon prices Climate and fiscal policy interact closely. The former imposes explicit prices for carbon emissions, while the latter affects emissions implicitly. We study the correspondence between explicit and implicit carbon pricing of a Ramsey-optimal fiscal policy in a neoclassical growth model of climate change. Our central result is that any arbitrary sequence of explicit carbon prices can be achieved implicitly through a blend of conventional taxes (e.g., consumption, energy, and income taxes), when lump-sum transfers are available. In a Ramsey setting, policy balances these taxes’ traditional revenue-raising role with the Pigouvian role of fixing the climate externality. We characterize the Ramsey and Pigouvian components of optimal tax rates. We show that explicit carbon pricing is implicitly implementable through a mix of conventional taxes also in this framework. We extend these findings to scenarios compatible with net-zero emissions, adding carbon capture technologies and a cap on cumulative emissions Journal of Environmental Economics and Management Volume 125, May 2024, 102950 (Online ISSN: 1096-0449) 2024-03-19T17:26:34Z 2024-03-19T17:26:34Z 2024 info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion https://repositorio.utdt.edu/handle/20.500.13098/12492 spa Journal of Environmental Economics and Management Volume 125, May 2024, 102950 info:eu-repo/semantics/openAccess https://creativecommons.org/licenses/by/4.0/ 19 p. application/pdf application/pdf Journal of Environmental Economics and Management (Online ISSN: 1096-0449)
institution Universidad Torcuato Di Tella
institution_str I-57
repository_str R-163
collection Repositorio Digital Universidad Torcuato Di Tella
language Español
orig_language_str_mv spa
topic Fiscal policy
Política Fiscal
Optimal taxation
Tributación óptima
Tax equivalence
Implicit carbon prices
spellingShingle Fiscal policy
Política Fiscal
Optimal taxation
Tributación óptima
Tax equivalence
Implicit carbon prices
Belfiori, Elisa
Rezai, Armon
Implicit carbon prices: Making do with the taxes we have
topic_facet Fiscal policy
Política Fiscal
Optimal taxation
Tributación óptima
Tax equivalence
Implicit carbon prices
description Climate and fiscal policy interact closely. The former imposes explicit prices for carbon emissions, while the latter affects emissions implicitly. We study the correspondence between explicit and implicit carbon pricing of a Ramsey-optimal fiscal policy in a neoclassical growth model of climate change. Our central result is that any arbitrary sequence of explicit carbon prices can be achieved implicitly through a blend of conventional taxes (e.g., consumption, energy, and income taxes), when lump-sum transfers are available. In a Ramsey setting, policy balances these taxes’ traditional revenue-raising role with the Pigouvian role of fixing the climate externality. We characterize the Ramsey and Pigouvian components of optimal tax rates. We show that explicit carbon pricing is implicitly implementable through a mix of conventional taxes also in this framework. We extend these findings to scenarios compatible with net-zero emissions, adding carbon capture technologies and a cap on cumulative emissions
format Artículo
publishedVersion
author Belfiori, Elisa
Rezai, Armon
author_facet Belfiori, Elisa
Rezai, Armon
author_sort Belfiori, Elisa
title Implicit carbon prices: Making do with the taxes we have
title_short Implicit carbon prices: Making do with the taxes we have
title_full Implicit carbon prices: Making do with the taxes we have
title_fullStr Implicit carbon prices: Making do with the taxes we have
title_full_unstemmed Implicit carbon prices: Making do with the taxes we have
title_sort implicit carbon prices: making do with the taxes we have
publisher Journal of Environmental Economics and Management (Online ISSN: 1096-0449)
publishDate 2024
url https://repositorio.utdt.edu/handle/20.500.13098/12492
work_keys_str_mv AT belfiorielisa implicitcarbonpricesmakingdowiththetaxeswehave
AT rezaiarmon implicitcarbonpricesmakingdowiththetaxeswehave
_version_ 1808040661146927104

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