Share This Article:

Can a Carbon Tax Be Effective without a Grand Coalition?

Abstract Full-Text HTML XML Download Download as PDF (Size:125KB) PP. 12-18
DOI: 10.4236/tel.2014.41003    2,945 Downloads   4,256 Views  
Author(s)    Leave a comment


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.


[1] R. H. Coase, “The Problem of Social Cost,” Journal of Law and Economics, Vol. 3, No. 1, 1960, pp. 1-44.
[2] L. S. Shapley and M. Shubik, “Quasi-Cores in a Monetary Economy with Non-Convex Preferences,” Econometrica, Vol. 34, No. 4, 1966, pp. 805-827.
[3] M. L. Weitzman, “Prices vs. Quantities,” Review of Economic Studies, Vol. 41, No. 4, 1974, pp. 477-491.
[4] W. A. Pizer, “Combining Price and Quantity Controls to Mitigate Global Climate Change,” Journal of Public Economics, Vol. 85, No. 3, 2002, pp. 409-434.
[5] M. Hoel and L. Karp,“Taxes versus Quotas for a Stock Pollutant,” Resource and Energy Economics, Vol. 24, No. 4, 2002, pp. 367-384.
[6] R. G. Newell and W. A. Pizer, “Regulating Stock Externalities under Uncertainty,” Journal of Environmental Economics and Management, Vol. 45, No. 2, 2003, pp. 416-432.
[7] C. Fischer and R.G. Newell, “Environmental and Technology Policies for Climate Mitigation,” Journal of Environmental Economics and Management, Vol. 55, No. 2, 2008, pp. 142-162.
[8] T. M. Selden and D. Song, “Environmental Quality and Development: Is There a Kuznets Curve for Air Pollution Emissions?” Journal of Environmental Economics and Management, Vol. 27, No. 2, 1994, pp. 147-162.
[9] G. M. Grossman and A. B. Krueger, “Economic Growth and the Environment,” Quarterly Journal of Economics, Vol. 110, No. 2, 1995, pp. 353-377.
[10] A. Diekmann and A. Franzen, “The Wealth of Nations and Environmental Concern,” Environment and Behavior, Vol. 31, No. 4, 1999, pp. 540-549.
[11] A. Franzen, “Environmental Attitudes in International Comparison: An Analysis of the ISSP Surveys 1993 and 2000,” Social Science Quarterly, Vol. 84, No. 2, 2003, pp. 297-308.

comments powered by Disqus

Copyright © 2019 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.