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Climate policy

Journal article
Authors John Hassler
Per Krusell
Jonas Nycander
Published in Economic Policy
Volume 31
Issue 87
Pages 503-558
ISSN 0266-4658
Publication year 2016
Published at Department of Economics
Pages 503-558
Language en
Links https://doi.org/10.1093/epolic/eiw0...
Keywords Climate policy
Subject categories Economics

Abstract

This paper makes suggestions for climate policy and defends them based on recent research in economics and the natural sciences. In summary: (i) the optimal carbon tax is rather modest; (ii) the key climate threat is coal; (iii) a carbon tax is to be preferred over a quantity-based system; (iv) the optimal tax on carbon does not appreciably harm growth; (v) subsidies to green technology are beneficial for the climate only to the extent that they make green technology outcompete coal; and (vi) a carbon tax is politically feasible.

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