Can a Carbon Tax Be Effective without a Grand Coalition?


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.

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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.

Conflicts of Interest

The authors declare no conflicts of interest.


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