Publication Date
2011
Recommended Citation
Levy, Amnon, A Stock Targeting International Carbon-Tax Rule with Uncertainty and Diminishing Compliance, Department of Economics, University of Wollongong, Working Paper 09-11, 2011, 10.
https://ro.uow.edu.au/commwkpapers/237
Abstract
This paper develops a rule for setting periodically and internationally a carbon-dioxide atmospheric stock limiting tax in a world inhabited by expected utility maximizing stakeholders facing diminishing mean and increasing variance of their output level due to climate change. The stakeholders are classified as poor, hence unable and/or unwilling to pay, countries and rich countries. Due to ideological and cultural differences, the rich countries' willingness to pay the tax is not identical. Consequently, the number of complying rich countries diminishes with the tax level.