The social cost of carbon in a non-cooperative world

• 成果类型: Article
• 署名作者: Hambel, Christoph; Kraft, Holger; Schwartz, Eduardo
• 署名单位: Goethe University Frankfurt; University of California System; University of California Los Angeles; Simon Fraser University; National Bureau of Economic Research
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2021.103490
• 发表日期: 2021
• 关键词: Climate change economics; Carbon abatement; Non-cooperative game; differential game; TRADE; DICE

摘要

The recent literature has derived simple formulas for the Social Cost of Carbon (SCC) that are easy to interpret, but that only apply to the global economy. This is an issue since international transfers to sustain the global optimum with the same carbon price for all countries are still lacking after thirty years of climate summits. The main research objective of our paper is to obtain tractable analytical and interpretable formulas for the SCC, the optimal carbon taxes, and the optimal consumption-abatement strategies in a non-cooperative world. We find that the optimal taxes are proportional to national GDP and can be decomposed into a domestic and a foreign component where the latter stems from trade. Besides, heterogeneity in country-specific damage functions together with the size of international trade significantly affects the regional distribution of the SCC. Consequently, trade can also affect the total amount of carbon dioxide emitted into the atmosphere. (C) 2021 Elsevier B.V. All rights reserved.