Open Access. Powered by Scholars. Published by Universities.®
Social and Behavioral Sciences Commons™
Open Access. Powered by Scholars. Published by Universities.®
- Discipline
- File Type
Articles 1 - 5 of 5
Full-Text Articles in Social and Behavioral Sciences
Negative Leakage, Don Fullerton, Daniel H. Karney, Kathy Baylis
Negative Leakage, Don Fullerton, Daniel H. Karney, Kathy Baylis
Daniel H Karney
Our analytical general equilibrium model solves for effects of a small increase in carbon tax on leakage—the increase in emissions elsewhere. Identical consumers buy two goods using income from endowments that are mobile between sectors. Usually an increase in one sector’s tax raises output price, so consumption shifts to the other good, causing positive leakage. Here, we find a new negative effect not recognized in existing literature: the taxed sector substitutes away from carbon into clean inputs, so it may absorb resources, shrink the other sector, and reduce their emissions. This “abatement resource effect” could offset some or all of …
Cost E#11;Ffectiveness Of Unilateral Carbon Policy, Kathy Baylis, Don Fullerton, Daniel H. Karney
Cost E#11;Ffectiveness Of Unilateral Carbon Policy, Kathy Baylis, Don Fullerton, Daniel H. Karney
Daniel H Karney
This paper makes several contributions. First, we demonstrate the generality of the Fullerton, Karney, and Baylis (2012) model by showing cases where leakage can exceed 100 percent. We solve for conditions under which total emissions increase or decrease. We also solve for welfare effects, and for “cost effectiveness” (the additional welfare cost per ton of net abatement). And we explore the relationship between the sign of leakage and the sign of the effect on welfare.
Multiple Pollutants, Unovered Sectors, And Suboptimal Environmental Policies, Daniel Karney, Don Fullerton
Multiple Pollutants, Unovered Sectors, And Suboptimal Environmental Policies, Daniel Karney, Don Fullerton
Daniel H Karney
In our analytical general equilibrium model where two polluting inputs can be substitutes or complements in production, we study the effects of a tax on one pollutant in two cases: one where both pollutants face taxes and the second where the other pollutant is subject to a permit policy. In each case, we solve for closed-form solutions that highlight important parameters. We demonstrate two important ways that environmental taxes and permits are not equivalent. First, the change in the pollutant facing a tax increase depends on whether the other pollutant is subject to a tax or permit policy. Second, if …
Combinations Of Instruments To Achieve Low-Carbon Vehicle-Miles, Don Fullerton, Daniel H. Karney
Combinations Of Instruments To Achieve Low-Carbon Vehicle-Miles, Don Fullerton, Daniel H. Karney
Daniel H Karney
In cases where the first-best carbon tax and a reasonable second-best gasoline tax are unavailable, this paper demonstrates how alternative combinations of instruments can form economically-sound, environmentally-motivated policies for substantial reductions in vehicle carbon emissions. In order to implement alternative approaches successfully, our point is that policymakers may need to take a holistic approach when designing policy. This holistic approach would recognise that policies to reduce carbon emissions must be politically feasible, and that all sectors of the economy generate carbon emissions. A holistic approach would not focus just on one method of abatement, like encouraging low-carbon vehicle technologies, but …
The Allocation Of Permits In U.S. Climate Change Legislation, Don Fullerton, Daniel H. Karney
The Allocation Of Permits In U.S. Climate Change Legislation, Don Fullerton, Daniel H. Karney
Daniel H Karney
Don Fullerton and Daniel Karney of the University of Illinois take a hard look at the allocation of CO2 emissions permits under the Waxman-Markey bill and give it minimally passing marks.