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ECONOMICS AND CLIMATE CHANGE: INTEGRATED ASSESSMENT IN A MULTI-REGION WORLD

Artikel i vetenskaplig tidskrift
Författare John Hassler
Per Krusell
Publicerad i Journal of the European Economic Association
Volym 10
Nummer/häfte 5
Sidor 974-1000
ISSN 1542-4766
Publiceringsår 2012
Publicerad vid Institutionen för nationalekonomi med statistik
Sidor 974-1000
Språk en
Länkar dx.doi.org/10.1111/j.1542-4774.2012...
Ämnesord growth
Ämneskategorier Nationalekonomi

Sammanfattning

This paper develops a model that integrates the climate and the global economyan integrated assessment modelwith which different policy scenarios can be analyzed and compared. The model is a dynamic stochastic general-equilibrium setup with a continuum of regions. Thus, it is a full stochastic general-equilibrium version of RICE, Nordhauss pioneering multi-region integrated assessment model. Like RICE, our model features traded fossil fuel but otherwise has no markets across regionsthere is no insurance nor any intertemporal trade across them. The extreme form of market incompleteness is not fully realistic but arguably not a bad approximation of reality. Its major advantage is that, along with a set of reasonable assumptions on preferences, technology, and nature, it allows a closed-form model solution. We use the model to assess the welfare consequences of carbon taxes that differ across as well as within oil-consuming and -producing regions. We show that, surprisingly, only taxes on oil producers can improve the climate: taxes on oil consumers have no effect at all. The calibrated model suggests large differences in views on climate policy across regions.

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