148 research outputs found
Economic growth and the social cost of carbon: additive versus multiplicative damages
No full textIn a calibrated integrated assessment model of Ramsey growth and climate change in the global economy we investigate the differential impact of additive and multiplicative global warming damages for both a socially optimal and business-as-usual scenario. Fossil fuel is available at a cost which rises as reserves diminish and a carbon-free backstop is supplied at decreasing cost. If damages are not proportional to aggregate production and the economy is along a development path, the optimal carbon tax is smaller. The economy switches later from fossil fuel to the carbon-free backstop and leaves less fossil fuel in situ. By adjusting climate policy in this way there is very little difference on the paths for global consumption, output and capital, and thus very little difference for social welfare despite the higher temperatures. For all specifications the optimal carbon tax is not a fixed proportion of world GDP but must follow a hump shape
The Economics of the Global Environment—Catastrophic Risks in Theory and Practice
No full textThe world economy is changing fundamentally and irrevocably in front of our eyes. There is no disputing the fact. Yet the evolution of economics as a science does not match the sea of change we observe in the real world
Conditional Optimism: Economic Perspectives on Deep Decarbonization
No full textMichael Grubb responds to INET research by Gregor Semieniuk, Lance Taylor, and Armon Rezai and Enno Schröder and Servaas Storm, arguing that “conditional optimism” rather than pessimism is how economists should view the prospect of growth under decarbonization
The Opportunity Cost of Climate Policy: A Question of Reference
No full textThe cost of climate policy depends on the no-policy alternative without which the opportunity cost of climate action cannot be determined. This reference path has to reflect the current failure in the market for carbon emissions: due to a negative externality, private
investment decisions do not consider the climate damage they entail; agents overinvest in conventional capital and underinvest in climate capital. Internalization of climate damage lowers the private return to capital; agents reduce investment in favor of mitigation and consumption. Optimal climate mitigation increases welfare of the present and
the future. Simulation of the inefficient no-policy scenario in DICE-07 confirms that this point numerically. (author's abstract
The axiomatic approach to the ranking of infinite streams
No full textThe history of the axiomatic approach to the ranking of infinite streams starts with Koopmans' (1960) characterization of the discounted utilitarian rule. This rule, however, meets Chichilnisky's axiom of dictatorship of the present and puts future generations offside. Recently, Lauwers (2010a) and Zame (2007) have uncovered the impossibility to combine in a constructible way the requirements of equal treatment, sensitivity, and completeness.
This contribution presents and discusses different axioms proposed to guide the ranking of infinite streams and the criteria they imply. The literature covered in this overview definitely points towards a set of meaningful alternatives to discounted utilitarianism.status: Accepte
Global carbon taxation: Intuition from a back-of-the-envelope calculation
No full textGlobal carbon taxation: Intuition from a back-of-the-envelope calculation / Armon Rezai & Rick van der Ploeg, Vox, 15/01/2015 http://www.voxeu.org/article/global-carbon-taxation The failure of markets to price carbon emissions appropriately leads to excessive fuel use and induces global warming. This column suggests a new, back-of-the-envelope rule for calculating the global carbon price. The authors find that fighting global warming requires a price of around $15 per ton of emitted CO2, or ..
Cycles of Demand and Distribution and Monetary Policy in the US Economy
No full textThe role of monetary policy on the cyclical behavior of the labor share and capacity utilization in the US economy is studied empirically. Previous estimation results remain robust; the inclusion of the rate of interest does not
alter the underlying specification of the distributive demand regime. Next, the role of monetary policy on net borrowing flows for four institutional sectors are
analyzed. Interest rate effects appear most important for households. Based on this finding, implications for countercyclical stabilization policy are spelled out. (author's abstract
Revue des blogs - vendredi 5 janvier 2018
No full textHow to deal with climate change deniers: Price carbon! / Rick van der Ploeg and Armon Rezai, Vox, 5/01/2018 Trump’s election has brought climate change deniers to the centre of global policymaking. This column uses Pascal’s wager as a model to explore optimal policy given uncertainty over the fundamental causes of global warming. This agnostic approach finds that assigning even a high probability to climate change deniers being correct has insignificant effects on policy. Pricing carbon is s..
Abandoning fossil fuel : how fast and how much ?
No full textAbandoning fossil fuel : how fast and how much ? / Armon Rezai and Frederick van der Ploeg. Oxford : Oxford Centre for the Analysis of Resource Rich Economies, September 2013, 40 p. (OxCarre Research Paper 123) http://d.repec.org/n?u=RePEc:oxf:wpaper:oxcarre-research-paper-123&r=ene Authors's abstract : Climate change must deal with two market failures, global warming and learning by doing in renewable use. The social optimum requires an aggressive renewables subsidy in the near term and a gr..
- …
