Working Paper: NBER ID: w16878
Authors: James B. Davies; Xiaojun Shi; John Whalley
Abstract: Global carbon pricing can yield revenues which are large enough to create significant global pro-poor redistributive opportunities. We analyze alternative multidecade growth trajectories for major global economies with carbon tax rates designed to stabilize emissions in the presence of both continued country growth and autonomous energy use efficiency improvement. In our central case analysis, revenues from globally internalizing carbon pricing rise to 7% and then fall to 5% of gross world product. High growth in India and China is the major equalizing force globally over time, but the incremental redistributive effects that can be achieved using global carbon pricing revenues are large both in absolute and relative terms. Revenues from carbon pricing depend on growth and energy efficiency improvement parameters as well as on the price elasticity of demand for fossil fuels.
Keywords: No keywords provided
JEL Codes: O19; Q56
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Carbon Pricing Revenues (H23) | Global Poverty Reduction (F63) |
| Economic Growth (O49) | Inequality Reduction (D63) |
| Direct Transfers from Carbon Pricing Revenues (H23) | Global Poverty Reduction (F63) |
| Economic Growth (O49) | Global Inequality Reduction (F63) |
| Carbon Pricing Revenues (H23) | Global Gini Coefficient Reduction (D31) |