Taxes, Permits, and Climate Change

DSpace/Manakin Repository

Taxes, Permits, and Climate Change

Citable link to this page

 

 
Title: Taxes, Permits, and Climate Change
Author: Kaplow, Louis
Citation: Louis Kaplow, Taxes, Permits, and Climate Change (Harvard John M. Olin Discussion Paper Series, No. 675, Aug. 2010).
Full Text & Related Files:
Abstract: This essay revisits the question of instrument choice for the regulation of externalities in the context of climate change. The central point is that the Pigouvian prescription to equate marginal control costs with the expected marginal benefits of damage reduction should guide the design of both carbon taxes and permit schemes. Because expected marginal damage rises nonlinearly, a corresponding nonlinear tax – or an equivalent price implemented through a quantity-adjusted permit scheme – is second best. Also considered are political factors, distinctive features of regulating a stock pollutant, and ex ante distortions due to the anticipation of transition relief (such as by receiving more free permits for greater emissions). Finally, distributive concerns are examined, with emphasis on the conceptual and practical benefits of addressing distributive issues with the tax and transfer system rather through adjustments to regulatory schemes that usually render them less effective.
Published Version: http://www.law.harvard.edu/programs/olin_center/papers/pdf/Kaplow_675.pdf
Other Sources: http://ssrn.com/abstract=1657138
Terms of Use: This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:30064402
Downloads of this work:

Show full Dublin Core record

This item appears in the following Collection(s)

 
 

Search DASH


Advanced Search
 
 

Submitters