Optimal Carbon Offsets with Heterogeneous Regions

We study optimal climate policy in a global economy where regions differ in wealth and vulnerability to climate change. Carbon emissions from production generate out- put losses - a negative climate externality - and a technology to absorb and offset these emissions is available to all regions. W...

Descripción completa

Detalles Bibliográficos
Autores principales: Belfiori, Elisa, Macera, Manuel
Formato: info:eu-repo/semantics/preprint submittedVersion
Lenguaje:Español
Publicado: Universidad Torcuato Di Tella 2024
Materias:
Optimal Policy
Políticas Públicas
Climate Change
Cambio Climático
Inequality
Dióxido de carbono
Carbon dioxide
Elaboración de políticas
Policy making
Heterogeneous agents
Acceso en línea:https://repositorio.utdt.edu/handle/20.500.13098/12740
Aporte de:
Repositorio Digital Universidad Torcuato Di Tella de Universidad Torcuato Di Tella
id I57-R163-20.500.13098-12740
record_format dspace
spelling I57-R163-20.500.13098-127402024-06-04T07:00:21Z Optimal Carbon Offsets with Heterogeneous Regions Belfiori, Elisa Macera, Manuel Optimal Policy Políticas Públicas Climate Change Cambio Climático Inequality Dióxido de carbono Carbon dioxide Elaboración de políticas Policy making Heterogeneous agents We study optimal climate policy in a global economy where regions differ in wealth and vulnerability to climate change. Carbon emissions from production generate out- put losses - a negative climate externality - and a technology to absorb and offset these emissions is available to all regions. We investigate how inequality shapes the stance of the global climate policy and the schedule of net emissions across regions: emissions net of carbon offsets. We provide an aggregation result that shows that the model with regional heterogeneity can be cast into a representative region world economy with a different discount factor and damage function elasticity to net emissions. We use this result to show that (i) Requiring all regions to contribute equally to carbon offsets ex- acerbates inequality and, therefore, efficiency calls for a less aggressive climate policy with more emissions and less carbon offsetting than in a representative agent world; (ii) When carbon offsets are allowed to depend on wealth, a more aggressive climate policy is optimal; (iii) Any global net emissions target prescribes positive net emis- sions for poor regions and negative net emissions for wealthy ones, with the burden on the rich increasing with inequality. These results highlight that carbon offsets play a crucial role in designing global climate policy because they act as a redistribution tool across unequal regions. 2024-06-03T15:20:12Z 2024-06-03T15:20:12Z 2024-02-08 info:eu-repo/semantics/preprint info:eu-repo/semantics/submittedVersion https://repositorio.utdt.edu/handle/20.500.13098/12740 spa info:eu-repo/semantics/openAccess https://creativecommons.org/licenses/by-sa/2.5/ar/ 50 p. application/pdf application/pdf Universidad Torcuato Di Tella
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 Optimal Policy
Políticas Públicas
Climate Change
Cambio Climático
Inequality
Dióxido de carbono
Carbon dioxide
Elaboración de políticas
Policy making
Heterogeneous agents
spellingShingle Optimal Policy
Políticas Públicas
Climate Change
Cambio Climático
Inequality
Dióxido de carbono
Carbon dioxide
Elaboración de políticas
Policy making
Heterogeneous agents
Belfiori, Elisa
Macera, Manuel
Optimal Carbon Offsets with Heterogeneous Regions
topic_facet Optimal Policy
Políticas Públicas
Climate Change
Cambio Climático
Inequality
Dióxido de carbono
Carbon dioxide
Elaboración de políticas
Policy making
Heterogeneous agents
description We study optimal climate policy in a global economy where regions differ in wealth and vulnerability to climate change. Carbon emissions from production generate out- put losses - a negative climate externality - and a technology to absorb and offset these emissions is available to all regions. We investigate how inequality shapes the stance of the global climate policy and the schedule of net emissions across regions: emissions net of carbon offsets. We provide an aggregation result that shows that the model with regional heterogeneity can be cast into a representative region world economy with a different discount factor and damage function elasticity to net emissions. We use this result to show that (i) Requiring all regions to contribute equally to carbon offsets ex- acerbates inequality and, therefore, efficiency calls for a less aggressive climate policy with more emissions and less carbon offsetting than in a representative agent world; (ii) When carbon offsets are allowed to depend on wealth, a more aggressive climate policy is optimal; (iii) Any global net emissions target prescribes positive net emis- sions for poor regions and negative net emissions for wealthy ones, with the burden on the rich increasing with inequality. These results highlight that carbon offsets play a crucial role in designing global climate policy because they act as a redistribution tool across unequal regions.
format info:eu-repo/semantics/preprint
submittedVersion
author Belfiori, Elisa
Macera, Manuel
author_facet Belfiori, Elisa
Macera, Manuel
author_sort Belfiori, Elisa
title Optimal Carbon Offsets with Heterogeneous Regions
title_short Optimal Carbon Offsets with Heterogeneous Regions
title_full Optimal Carbon Offsets with Heterogeneous Regions
title_fullStr Optimal Carbon Offsets with Heterogeneous Regions
title_full_unstemmed Optimal Carbon Offsets with Heterogeneous Regions
title_sort optimal carbon offsets with heterogeneous regions
publisher Universidad Torcuato Di Tella
publishDate 2024
url https://repositorio.utdt.edu/handle/20.500.13098/12740
work_keys_str_mv AT belfiorielisa optimalcarbonoffsetswithheterogeneousregions
AT maceramanuel optimalcarbonoffsetswithheterogeneousregions
_version_ 1809230084423286784

Ejemplares similares