Greenhouse Gas Property: An Adaptable Climate Policy for an Uncertain World
24 Pages Posted: 27 Apr 2013
Date Written: July 6, 2007
I propose a new climate policy, called greenhouse gas (GHG) property, that makes atmospheric GHG stocks the unit of regulation. The initial extractor or importer of a fossil fuel would own tradable carbon property that would become carbon dioxide (CO2) property upon combustion. This CO2 property could be taxed for as long as it affects the atmosphere. In addition to obtaining emissions reductions as with a carbon emission tax, the ongoing property taxation would provide an incentive to develop and deploy air capture technologies that could remove CO2 from the atmosphere. Because the government could adjust the tax rate on previously and contemporarily emitted property, this property policy uses new information about climate change in ways that other climate policies cannot. To avoid a property policy being undermined by firms insufficiently valuing future taxes, we could combine a property scheme with a cap-and-trade program to create a capped property policy.
JEL Classification: H23, Q54
Suggested Citation: Suggested Citation