Sustainable Climate Treaties
40 Pages Posted: 23 Jun 2011
There are 2 versions of this paper
Sustainable Climate Treaties
Sustainable Climate Treaties
Date Written: June 23, 2011
Abstract
We examine a global refunding scheme for mitigating climate change. Countries pay an initial fee into a global fund that is invested in long-run assets. In each period, part of the fund is distributed among the participating countries in relation to the emission reductions they have achieved in this period. We identify two possible types of sustainable treaty. A first-best sustainable treaty involves varying amounts of refunded wealth and a minimal amount of initial fees inducing socially desirable abatement efforts in each period. In a second best sustainable treaty with only two parameters – optimally selected initial fees and constant refunds equal to the interest earned on the fund – the stock of greenhouse gases converges to the socially optimal stock. Finally, we suggest ways for countries to raise money for the payment of initial fees that are neutral to tax payers and international capital markets.
Keywords: climate change mitigation, refunding scheme, international agreements, sustainable treaty
JEL Classification: Q54, H23, H41
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Global Refunding and Climate Change
By Hans Gersbach and Ralph Winkler
-
On the Design of Global Refunding and Climate Change
By Hans Gersbach and Ralph Winkler
-
On the Design of Global Refunding and Climate Change
By Hans Gersbach and Ralph Winkler
-
Emission Taxes and the Design of Refunding Schemes
By Hans Gersbach and Till Requate
-
International Emission Permit Markets with Refunding
By Hans Gersbach and Ralph Winkler
-
International Emission Permit Markets with Refunding
By Hans Gersbach and Ralph Winkler
-
International Emission Permit Markets with Refunding
By Hans Gersbach and Ralph Winkler