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Can a Carbon Tax Be Effective without a Grand Coalition?

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DOI: 10.4236/tel.2014.41003    2,945 Downloads   4,256 Views  
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ABSTRACT

This paper analyzes an interaction between a carbon-tax collecting and investing coalition of rich countries, abstaining rich countries and poor countries. The non-coalition countries may suffer from loss of reputation and guilt and may overstate the emission-moderating effect of the carbon tax. As long as these three types of countries react to their counterparts’ emissions, taxing carbon-dioxide emissions unilaterally does not necessarily reduce the global emissions. Nor does it necessarily moderate the emissions of the coalition.

Conflicts of Interest

The authors declare no conflicts of interest.

Cite this paper

A. Levy, "Can a Carbon Tax Be Effective without a Grand Coalition?," Theoretical Economics Letters, Vol. 4 No. 1, 2014, pp. 12-18. doi: 10.4236/tel.2014.41003.

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